HomeMy WebLinkAbout2018-367 Housing - Community Home Trust Grant Agreement3
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FILED Mark Ghilton
Register of Deeds, Orange Co,NC
Recording Fee: $.00
NC Real Estate TX: $.00
AFFIDAVIT OF CORRECTION OF TYPOGRAPHICAL OR OTHER MINOR ERROR
[N.C.G.S. 47 -36.1]
Prepared by: Anne Marie Tosco, Orange County Attorney's Office, P.O.. Box 8181, Hillsborough, NC 27278
Each undersigned Affiant, jointly and severally, being first duly sworn, hereby swears or affirms that the Declaration of
Restrictive Covenants recorded on August 20, 2018 in Book 6511, Page 480, Orange County Registry, by and between
Orange County, North Carolina and Community Home Trust, Inc., contained the following typographical or other minor
error:
Attached blank, placeholder exhibits rather than Exhibit B, Grant Agreement, and Exhibit C, Ground Lease Agreement,
which are attached to this Affidavit of Correction.
Affiant makes this Affidavit for the purpose of correcting the above - described instrument as follows:
Attaching and incorporating executed Grant Agreement (Exhibit B) and form of Ground Lease Agreement (Exhibit C) to
Declaration of Restrictive Covenants.
Affiant is knowledgeable of the agreement and the intention of the parties in this regard. Affiant is the (check one)
X Drafter of original instrument being corrected
Closing attorney for transaction involving instrument being corrected
Attorney for grantor /mortgagor named above in instrument being corrected
Owner of the property described in instrument being corrected
Other (Explain:
A copy of the original instrument (in part or in whole) ( ) is / (X) is not attached.
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Signature of Affiant
Print or Type Name: Nine Ma Rie TUSCUMa Rie 'TQSCU
October 3, 2008
Signature of Affiant
Print or Type Name:
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NORTH CAROLINA
ORANGE COUNTY
GRANT AGREEMENT
This is an AGREEMENT between ORANGE COUNTY, NORTH CAROLINA, a
general local governmental unit of the State of North Carolina, (hereinafter referred to as the
"County ") and COMMUNITY HOME TRUST INC., a North Carolina non - profit corporation
(hereinafter referred to as "CHT "). The effective date of this agreement is
WITNESSETH
WHEREAS, the Orange County HOME Consortium has designated $16,670.90 in FY
2013 HOME funds for the purpose of homeownership assistance for first -time homebuyers of
Land Trust homes by reducing the purchase price to meet buyers' affordability needs (hereafter
referred to as the "Project" or the "project dwelling units "); and
WHEREAS, Orange County is the lead entity of the Orange HOME Consortium, so
designated in an agreement dated July 1, 2011, and as such is the lead entity in a representative
capacity for all members of the Orange HOME Consortium for the purposes of carrying out the
HOME Program in accordance with the Title II of the Cranston - Gonzalez National Affordable
Housing Act (Pub. L. 101 -625), (42 U.S.C. 3535(d.) et. seq.) (hereinafter referred to as the "Act "),
and as further defined in the Federal Program Requirements provided by the U.S. Department of
Housing and Urban Development; and
WHEREAS, the Community Home Trust (CHT) formerly known as Orange
Community Housing and Land Trust (OCHLT) intends to provide financial assistance to up to
five (5) first -time homebuyers by making housing available for lease, as described herein, to
families who earn 80% or below of the HUD area median income as described in CHT's
Application for Funding dated May 10, 2018, which Application is incorporated by reference
into this Agreement and is on file in the Orange County Department of Housing and
Community Development.
WHEREAS, a first -time homebuyer for the purposes of this program is defined as any
low income household that has not owned a home within the past five (5) years including
households living in manufactured housing not permanently affixed to a foundation, or owner -
occupants of homes not feasible for rehabilitation and has lived or worked in Orange County for
at least one year prior to the home purchase;
WHEREAS, notwithstanding any provision of this Agreement, the County and CHT
hereto agree and acknowledge that this Agreement does not constitute a commitment of funds
or site approval, and that such commitment of funds or approval may occur only upon
satisfactory completion of an environmental review and receipt by Orange County of a Release
of Funds from the U.S. Department of Housing and Urban Development under 24 CFR Part §58
if applicable. The parties further agree that the provision of such funds to the project is
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conditioned on Orange County's determination to proceed with, modify, or cancel the project
based on the results of a subsequent environmental review.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations
contained herein, it is agreed between the parties hereto as follows:
1. CHT agrees to lease dwelling units to first -time homebuyers in the following manner.
a. CHT shall lease the housing units, as herein defined, to qualified buyers whose
income is up to but no more than 80% of the area median household income by family
size, as determined by the U.S. Department of Housing and Urban Development at the
time of the sale.
b. The period of affordability will be at least 99 years and will be secured by a CHT
Ground Lease of the housing units with restrictions to ensure compliance. Further
security shall be in the form of a Declaration of Restrictive Covenants (Exhibit C) that
will make the County a third party beneficiary of and successor to the long term
affordability remedies in the Ground Lease in the event of a failure of or inability of
CHT to enforce the long term affordability remedies in the Ground Lease.
C. CHT is responsible for soliciting CHT Ground Lease tenants for the housing
units. CHT and /or the Ground Lease tenants shall be responsible for securing permanent
mortgage financing for the housing units.
d. CHT is responsible for verifying the income of the Ground Lease tenants,
explaining the land trust program and the CHT Ground Lease to potential tenants and
certifying by written documentation signed by the tenants that the program requirements
have been fully explained. CHT shall maintain purchaser files as part of its Books and
Records as required and for the period of time required by Section 11.G. of this
Agreement.
2. At the time of resale of each of the project dwelling units, CHT will convey a housing
unit to a qualified homebuyer. Each housing unit will consist of a 99 year Ground Lease
(renewable for an additional 99 years) to the project dwelling unit. The Ground Lease,
the form of which is Exhibit D hereto, provides for the long term affordability (at least
99 years) of the housing unit and provides remedies to insure the long term affordability
of the housing unit. CHT hereby declares and covenants, on behalf of itself and all
future owners of the Property, that, during the term of the Declaration of Restrictive
Covenants, the County is a third party beneficiary of and successor to each and every
remedy intended to insure the long term affordability of the housing unit that is provided
for in the Ground Lease and may, in the event of the failure or default of the Lessor in
the Ground Lease to insure the long term affordability of the housing unit as provided
for in the Ground Lease, exercise all rights and remedies available to the Lessor in the
Ground Lease for that purpose.
3. Each housing unit must have a value that does not exceed 95% of the area median
purchase price for that type of housing.
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Value must be established by one of the following methods:
i. An appraisal by a qualified appraiser.
ii. Tax assessments may be used to establish value, but only if they are
current and can be computed at 100% of market value.
4. USE OF HOME FUNDS /SUBSIDY TYPE
A. CHT shall perform the projects or tasks related to its allocation of HOME funds as
provided in this Agreement, Exhibit A, Scope of Services, Exhibit B, Proposed Budget
and Source of Funds, the Declaration of Restrictive Covenants the form of which is
attached as Exhibit C, and the Ground Lease, the form of which is attached as Exhibit D.
All Exhibits, attachments and addendums annexed hereto or referred to herein are
hereby incorporated into and made a part of this Agreement as if set forth herein, as it
now reads or as it may be modified by the Parties.
B. CHT may not request disbursement of funds under this Agreement until the funds are
needed for payment of eligible costs. The amount of each request must be limited to the
amount needed for eligible costs as determined by Orange County staff and may not
exceed the amount needed. Program income must be disbursed before CHT requests
funds from the County.
C. Said funds shall be disbursed by check payable to CHT.
D. HOME funds provided will be as a grant to each subject property as a fixed subsidy.
5. AMOUNT OF HOME FUNDS
A. The County shall make available to CHT up to Sixteen Thousand Six Hundred and
Seventy Dollars and Ninety Cents ($16,670.90) pursuant to this Agreement.
B. Said funds shall be disbursed by the County to CHT for the performance of the services
described in Exhibit A.
6. TIMELINESS
CHT shall complete the Project by August 24, 2018. CHT will be responsible for
providing status reports to the County quarterly detailing the project activities until
project completion. In addition, CHT agrees to furnish to the County a copy of its annual
audit performed by a certified public accountant within 90 days of the end of each fiscal
year until the Project is complete.
The Project completion date is the closing date of the Ground Lease by a qualified buyer
of the last of the Project dwelling units. In the event that CHT is unable to proceed with
any aspect of the project in a timely manner, and County and CHT determine that
reasonable extension(s) for completion will not remedy the situation, then the
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Termination of Agreement provisions of this Agreement (Section I I.E.) shall pertain.
CHT may, at its option, submit a written request for a delay of completion for County
approval. The County may, at its option, approve any delay in the completion date or
declare CHT in default.
CHT shall monitor the housing units for affordability for the period of affordability —
ninety -nine (99) years and, if renewed, an additional ninety -nine years. Final contract
completion date shall be the end date of the last affordability period.
7. DURATION OF THE AGREEMENT AND AFFORDABILITY REQUIREMENT.
This Agreement will remain in effect for the Period of Affordability. Upon termination
or expiration of this Agreement, CHT shall transfer to the County any HOME funds on
hand at the time of expiration and accounts receivable attributable to the use of HOME
funds.
Housing assisted with HOME funds must meet the affordability requirements of 24 CFR
92.254. Under this Agreement, each housing unit must remain affordable for a period of
ninety -nine years. CHT retains full responsibility for compliance with the affordability
requirement for assisted housing units. CHT shall assure compliance with affordability
of assisted housing units by having recorded, no later than the time it leases the first of
the housing units, a "Declaration of Restrictive Covenants" (Exhibit C) on the Property.
To further assure compliance with the affordability requirements the Ground Lease shall
be made an attachment to the Declaration of Restrictive Covenants and recorded
therewith. All other security documents should be recorded thereafter.
This Declaration shall constitute and remain a first lien on the Property during the period
of affordability, unless otherwise provided by law or unless otherwise agreed by County.
It is further the responsibility of CHT to rerecord the Declaration of Restrictive
Covenants no later than one day before the expiration of 30 years of the date of its lease
of each of the housing units in the event the homeowner leasing the housing unit from
CHT is still the owner of the housing unit at the time of the rerecording. County retains
the right to periodically and every 30 years after the first recording of the Declaration of
Restrictive Covenants to register, with the Register of Deeds of Orange County, a notice
of preservation of the restrictive covenants on the Property as provided in North
Carolina General Statute § 4713 -4 or any comparable preservation law in effect at the
time of the recording of the notice of preservation. It is the intent of this Section of this
Agreement that the 99 year affordability requirement contained herein be accomplished
and that CHT and the County will do what is necessary to ensure that the same is not
extinguished by the Real Property Marketable Title Act or any comparable law
purporting to extinguish, by the passage of time, non possessory interests in real
property. CHT and the County agree to do what each must do to accomplish the 99 year
affordability requirement.
8. RESALE PROVISIONS. CHT shall assure compliance with long term affordability of
assisted housing units as provided for in the Ground Lease, which Ground Lease shall,
as to resale provisions, remain in substantially the form of the current version of the
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Ground Lease, a copy of which is an exhibit to the Declaration of Restrictive Covenants,
for at least 99 years.
9. CHT PERFORMANCE UNDER THIS AGREEMENT
A. CHT agrees and authorizes the County to conduct on -site reviews, examine client and
contractor records, client applications and to conduct any other procedures or practices
to assure compliance with these provisions.
B. CHT agrees to not violate any State or Federal laws, rules or regulations regarding a
direct or indirect illegal interest on the part of any employee or elected official of CHT
in the Project or payments made pursuant to this Agreement.
C. CHT agrees that to the best of its knowledge, neither the Project nor the funds provided
therefore, and the personnel employed in the administration of the program shall be in
any way or to any extent engaged in the conduct of political activities in contravention
of Chapter 15 of Title 5, United States Code, referred to as the Hatch Act.
D. CHT shall adopt the audit requirements of the Office of Management and Budget
(hereinafter "OMB ") Circular A -110, "Grants and Agreements with Institutions of
Higher Education, Hospitals, and Other Nonprofit Organizations," and Circular A -122,
"Cost Principles for Nonprofit Organizations," and OMB Circular A -133, "Audits of
Institutions of Higher Education and Other Non - Profit Institutions." CHT shall submit to
the County copy of said audit report. CHT shall permit the authorized representatives of
the County, HUD and the Comptroller General of the United States to inspect and audit
all data and reports of CHT relating to its performance under the Agreement.
E. County shall provide, upon request, copies of all laws, regulations and orders cited in
this Agreement.
F. CHT and County shall at all times observe and comply with Title 24 CFR Part 92 and all
applicable laws, ordinances or regulations of the Federal, State, County, and local
government, which may in any manner affect the performance of this Agreement, and
CHT shall perform all acts with responsibility to the County in the same manner as the
County is required to perform all acts with responsibility to the Federal government.
G. CHT hereby assures and certifies that it will comply with the regulations, policies,
guidelines and requirements with respect to the acceptance and use of HOME funds in
accordance with the policies of the County. Also, CHT certifies with respect to the
Project that it will be conducted and administered in compliance with:
1. Title VI of the Civil Rights Act of 1964 (Pub. L. 88 -352, 42 U.S.C. §§ 2000d et
seq.) and implementing regulations issued at 24 CFR Part I;
2. Title VIII of the Civil Rights Act of 1968 (Pub. L. 90 -208, 42 U.S.C. §§ 2000d
at seq.), as amended; and that Habitat will administer all programs and activities
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related to housing and community development in a manner to affirmatively
further fair housing;
3. Section 109 of the Housing and Community Development Act of 1974, as
amended; and the regulations issued pursuant hereto;
4. Section 3 of the Housing and Urban Development Act of 1968, as amended;
5. Executive Order 11246 -Equal Opportunity, as amended by Executive Orders
1 1375 and 12086, and implementing regulations issued at 41 CFR Chapter 60;
6. Executive Order 11063 -Equal Opportunity in Housing, as amended by Executive
Order 12259, and implementing regulations at 24 CFR Part 107;
7. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93 -112), as amended, and
implementing regulations when published in effect;
8. The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and
implementing regulations when published for effect;
9. The Fair Housing Act (42 U.S.C. 3601 -20);
H. CHT certifies by executing this Agreement that they have not been identified, and have
not utilized the services of any agent or subcontractor identified, on the list created by
the State Treasurer pursuant to G.S. 147- 86.58. By executing this Agreement CHT
certifies that they have not been identified, and have not utilized the services of any
agent or subcontractor identified, on the list created by the State Treasurer pursuant to
G.S. 147- 86.81. By executing this Agreement CHT affirms they are and shall remain in
compliance with Article 2 of Chapter 64 of the North Carolina General Statutes.
10. ADMINISTRATION AND REPORTING REQUIREMENTS
CHT shall submit to the County a quarterly Progress Report no later than the fifth day of
the months of January, April; July; October until the activity has been reported
completed.
11. MISCELLANEOUS PROVISIONS
A. Program Income. Program income as defined in 24 CFR § 92.2 shall be remitted to the
County.
B. Uniform Administrative Requirements. CHT must comply with the applicable
uniform administrative requirements of 24 CFR §92.505 and 24 CFR, Part 84,
specifically the following requirements of 24 CFR Part 84 which apply to subrecipients
receiving HOME funds that are private non - profit organizations: 84.2, 84.5, 84.13-
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84.16, 84.21, 84.22, 84.26- 84.28, 84.30, 84.31, 84.34, 84.37, 84.40- 84.48, 84.51, 84.60-
84.62, 84.72, and 84.73.
C. Other Program Requirements. CHT must carry out each activity in compliance with
all Federal laws and regulations described in 24 CFR, Part 92, subpart F for
homeownership projects and 24 CFR, Part 92, subpart H except that the subrecipient
does not assume the responsibilities for environmental review or intergovernmental
review.
D. Affirmative Marketing. If HOME funds will be used for housing containing five (5) or
more assisted units, CHT must prepare and submit an Affirmative Marketing Plan to the
County, in accordance with 24 CFR 92.351.
E. Termination of Agreement. The full benefit of the Project will be realized only after
the completion of the affordability periods for all Project dwelling units. It is the
County's intention that the full public benefit of the Project shall be completed under the
auspices of CHT for the assisted units as follows:
1. In the event that CHT is unable to proceed with any aspect of the Project in a timely
manner, and County and CHT determine that reasonable extension(s) for completion
will not remedy the situation, then CHT will retain responsibility for requirements
for any dwelling units assisted and County will make no further payments to the
CHT.
2. In the event that CHT, prior to the contract completion date, is unable to continue to
function due to, but, not limited to, dissolution or insolvency of the organization, its
filing a petition for bankruptcy or similar proceedings, or is adjudged bankrupt or
fails to comply or perform with provisions of this agreement, then CHT shall, upon
the County's request, convey to the County the Property assisted with HOME funds.
Conveyance shall be at the sole discretion of County and on a Project dwelling unit
by Project dwelling unit basis. Conveyance shall be on the terms set forth herein:
a. Conveyance shall occur within thirty (30) days of County and CRT's agreement
of CHT's inability to continue as a viable organization.
b. CHT shall convey the Property to the County by general warranty deed, free and
clear of all liens and encumbrances of record except those which create a
beneficial interest in County (Declaration of Restrictive Covenants and Deed of
Trust).
3. This Agreement may be terminated for convenience in accordance with 24 CFR
85.44.
F. Default, Remedies. This Agreement may be terminated by a non - defaulting party upon
an event of default hereunder, after written notice thereof and thirty (30) days grace
period in which the defaulting party may act to cure. As used herein, the term "an event
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of default" shall mean and refer to a failure or act of omission by either party with
respect to any undertaking, obligation, covenant or condition as set forth in this
Agreement. With respect to any event of default, the non - defaulting party may exercise
any right available to it at law or in equity with respect to such default. Notwithstanding
and in addition to the above, in accordance with 24 CFR 85.43, this Agreement may be
suspended or terminated by the County if CHT materially fails to comply with any term
of the Agreement. Remedies for breach of the provisions of this Agreement include but
are not limited to repayment of any funds deemed to be expended in an ineligible
manner.
G. Books and Records. CHT shall maintain records of its grant requirements under this
contract for a period of not less than five (5) full fiscal years following the contract
completion date.
CHT shall ensure access to records and financial statements, as necessary, to provide
effective monitoring and evaluation of project performance. Additionally, CHT
shall submit a copy of its annual audit to the County.
2. Upon reasonable advance notice, County or its authorized representatives may from
time to time inspect, audit, and make copies of any of CHT' records that relate to this
contract. If any audit by County discloses that payments to CHT were in excess of
the amount to which CHT was entitled under this contract, CHT shall promptly pay
to County the amount of such excess. If the excess is greater than 1% of the contract
amount, CHT shall also reimburse County its reasonable costs incurred in
performing the audit.
3. CHT shall maintain files of all purchasers residing in assisted units. Documentation
shall verify eligibility for federal assisted housing at the initial occupancy.
Information maintained shall include: tenant income level; name of family members;
ethnic data; family type — e.g. female head of household and disability status.
4. CHT shall maintain records verifying the affordability of the dwelling units.
H. Notices. Any Notice shall be in writing and shall be given by depositing the same in the
United States mail, post -paid and registered or certified, and addressed to the party to be
notified, with return- receipt requested, or by delivering the same in person to an officer
or principal of such party. Notice deposited in the mail in the manner here in above
described shall be effective upon mailing. For purposes of Notice, the addresses of the
parties shall, unless changed as hereinafter provided, be as follows:
i. To the County: Orange County
c/o Housing and Community Development
Department
P.O. Box 8181
Hillsborough, NC 27278
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ii. To CHT: Community Home Trust
109 Conner Drive, Suite 1000
Chapel Hill, NC 27514
ATTN: Executive Director
Either the County or CHT may change the person or address to which any future Notice
shall be given as herein provided.
I. No Assignment. No transfer or assignment of the interest of CHT on this Agreement
shall occur without the prior written consent of the County; neither may CHT assign this
Agreement without the prior written consent of County.
J. Conflict of Interest. CHT agrees to abide by the provisions of 24 CFR 570.611 with
respect to conflicts of interest, and covenants that it presently has no financial interest
and shall not acquire any financial interest, direct or indirect, that would conflict in any
manner or degree with the performance of services required under this Agreement. CHT
further covenants that in performance of this Agreement no person having such a
financial interest shall be employed or retained by CHT hereunder. These conflicts of
interest provisions apply to any person who is an employee, agent, consultant, or elected
official or appointed official of the County, or any designated public agencies or
subrecipients that are receiving funds under the County HOME Investment Partnership
Program.
K. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
L. Indemnification. To the extent legally possible, CHT shall indemnify and hold County,
its officers, agents, and employees, harmless from and against any and all claims,
actions, liabilities, costs, including attorney fees and other costs of defense, arising out
of or in any way related to any act or failure to act by CHT, its employees, agents,
officers, and contractors in connection with this contract. In the event any such action or
claim is brought against County, CHT shall, upon County's tender, defend the same at
CHT's sole cost and expense, promptly satisfy any judgment adverse to County or to
County and CHT jointly, and reimburse the County for any loss, cost, damage, or
expense, including attorney fees suffered or incurred by the County.
M. Subcontracting. CHT shall not subcontract work under this Agreement, in whole or in
part, without the County's prior written approval. CHT shall require any approved
subcontractor to agree, as to the portion subcontracted, to comply with all applicable
federal, state, and local laws, rules, ordinances, and regulations at all times and in the
performance of the work and to comply with all applicable obligations of CHT
specified in this contract. Notwithstanding County's approval of a subcontractor, CHT
shall remain obligated for full performance of this contract and County shall incur no
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obligation to any subcontractor. CHT shall indemnify, defend, and hold County
harmless from all claims of its contractors.
N. No Joint Venture or Agency. The County and CHT each agree and acknowledge that
nothing contained herein or otherwise, including, without limitation, any act of the
County and CHT under this Agreement, shall be deemed or construed to create any
relationship of joint venture, partnership or agency between the parties.
O. Effect of Waiver or Forbearance. No failure by the County to insist upon the strict
performance of any term or condition of this Agreement, or to exercise any right or
remedy upon the breach by CHT of any of its obligations, agreements, or covenants
hereunder, shall be a waiver of such affected term or condition or of such breach; nor
shall any forbearance by the County to seek a remedy for any breach by CHT be a
waiver by the County of its rights and remedies with respect to that or any other breach.
P. Governing Law. This Agreement shall be construed in accordance with and governed
by the laws of the State of North Carolina. Any litigation arising out of this Agreement
shall be brought in courts sitting in North Carolina, with venue in Orange County.
Q. Severability. The provisions of this Agreement are independent of and separable from
each other, and no provision shall be affected or rendered invalid or unenforceable by
the fact that for any reason any other provision may be invalid or unenforceable in
whole or in part. If any provision of this Agreement or the application thereof to any
person or circumstances shall, to any extent, be or become invalid or unenforceable, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable, shall not
be affected thereby, and each provision of this Agreement shall be valid and be enforced
to the fullest extent permitted by law. The County and CHT agree to substitute for such
provision of this Agreement or the application thereof determined to be invalid or
unenforceable, such other provision as most closely approximates, in a lawful manner,
such invalid, illegal or unenforceable provision. If the County and CHT cannot agree,
they shall apply to a court of competent jurisdiction to substitute such provision as the
court deems reasonable and judicially valid, legal and enforceable. Such provision
determined by the court shall automatically be deemed part of this Agreement ab initio.
R. Equal Opportunity. CHT shall not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin, political affiliation or
belief, age, handicap, or familial status in the implementation of the Project.
S. Headings. Headings are for convenience only and shall not be used to interpret or
construe its provision.
T. Gender; Singular and Plural. As used herein, the neuter gender includes the feminine
and masculine. The masculine includes the feminine and neuter, and the feminine
includes the masculine and neuter and each includes a corporation, partnership or other
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legal entity when the context so requires. The singular number includes the plural and
vice versa, whenever the context so requires.
U. Recording. The parties hereto agree that upon notice to the other and at its own cost
and expense, a party may record this Agreement in the Office of Register of Deeds for
Orange County.
V. Compliance with Laws. To the extent applicable, each party hereto agrees to comply
with all laws, ordinances and regulations affecting the Property from and after the date
hereof. Without limiting the generality of the foregoing, CHT shall comply with all
federal, state and local laws, regulations and ordinances applicable to the expenditure of
funds provided by the County, to purchase and develop the Property.
W. Publicity; Signage. CHT agrees to provide such publicity with respect to the County's
participation in the development of the Property as the County shall reasonably require.
Any signage at the Property shall acknowledge the County's role and contribution.
X. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute on and the
same instrument.
Y. No Third Party Rights. The parties hereto covenant and agree that nothing contained
in this Agreement or any act by the County or CHT shall be deemed or construed by the
parties or any third party to create any relationship of third party beneficiary, including
third party principal or agent, or to create any right, claim or cause of action against the
County, CHT or any of their respective officers, agents or employees by any third party.
Z. Performance of Government Functions. Notwithstanding anything in this Agreement
which may be to the contrary, nothing contained in this Agreement shall in any way
stop, limit or impair the County from exercising or performing any regulatory, policing
or governmental powers or functions with respect to the Property including, without
limitation, inspection of the Property in the performance of such functions.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their
hands and seals on the day and year first above written.
[SIGNATURES ON FOLLOWING PAGE]
11
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RB6613 104 14/58
COMMUNITY HOME TRUST, INC.
DocuSigned by:
Idol Ut NWU14
President
NORTH CAROLINA
ORANGE COUNTY
I, , Notary Public in and for the above named County and
State, do hereby certify that on this day personally appeared before me with
whom I am personally acquainted, who, being by me duly sworn, says that he is
of Community Home Trust, Inc, a North Carolina corporation, and that by
authority duly given and as the act of the corporation, the foregoing instrument was signed by
him on behalf of the corporation.
Witness my hand and notarial seal, this the day of
My commission expires:
ATTEST:
Notary Public
20_
ORANGE COUNTY, NORTH CAROLINA
F EDocuSigned by:
761A A , ht%t,�
Bonnie ammersley, County Manager
Donna Baker
Clerk to the Board of Commissioners
This document has been pre- audited in accordance with the N.C. Local Government and Fiscal
Control Act.
Garay Donaldson, Finance Director
D cuSigned by:
7D4E5181 =1409_
A roved as to form and legality
oeuSlgned by:
QlitAAA, Nl.aVtit, S h
Anne arie I osco, Staff Attorney
12
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RB6513 105 15/58
EXHIBIT A
SCOPE OF SERVICES
HOME funds will be used to provide financial assistance to up to five (5) first -time homebuyers
earning 80% or below of the area median income using FY 2013 funds.
13
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RB6513 106 16/58
Exhibit B
PROPOSED BUDGET
Proposed Uses of Funds
First -time Homebuyer Assistance
2013 (up to 5 second mortgages) $ 16,670.90
Total Uses of Funds $ 16,670.90
Sources of Funds
Orange County HOME funds
Total Sources of Funds
$ 16,670.90
$ 169670.90
CHT may not request disbursement of funds under this Agreement until the funds are needed
for payment of eligible costs. The amount of each request must be limited to eligible costs as
determined by the County's Housing and Community Development Department ( "HCD ").
Funds may be shifted between line items of the Project without prior approval of the County
only to the extent of "Minor Adjustments," defined as actions which do not result in a change in
the Project and so long as such Minor Adjustments do not exceed ten percent (10 %) of the line
item total from which the funds are being removed or to which the funds are being added, there
is no increase to the Total Renovation Cost specified in the above budget, and there are only
minor changes to the Plans and Specifications.
14
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Exhibit C
RB6513 107 17/58
Prepared by and return to: Anne Marie Tosco, Orange County Attorney's Office
P.O. Box 8181; Hillsborough, NC 27278
THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated
, by Community Home Trust, Inc. of Orange County, NC, Inc. for itself and
its successors and assigns ( "Owner "), is given as a condition precedent to the award of Orange
County HOME Investment Partnership Program funds.
RECITALS:
WHEREAS, the Orange County HOME Consortium has designated $16,670.90 in FY
2013 HOME funds for the purpose of homeownership assistance for first -time homebuyers of
Land Trust homes by reducing the purchase price to meet buyers' affordability needs hereafter
referred to as the "Project" or the "project dwelling units "; and
WHEREAS, Orange County is the lead entity of the Orange HOME Consortium, so
designated in an agreement dated July 1, 2011, and as such is the lead entity in a representative
capacity for all members of the Orange HOME Consortium for the purposes of carrying out the
HOME Program in accordance with the Title II of the Cranston - Gonzalez National Affordable
Housing Act (Pub. L. 101 -625), (42 U.S.C. 3535(d.) et. seq.) (hereinafter referred to as the "Act "),
and as further defined in the Federal Program Requirements provided by the U.S. Department of
Housing and Urban Development; and
WHEREAS, the Community Home Trust (CHT) formerly known as Orange
Community Housing and Land Trust (OCHLT) intends to provide financial assistance to up to
five (5) first -time homebuyers by making housing available for lease, as described herein, to
families who earn less than 80% of HUD area median income as described in CHT's
Application for Funding dated May 10, 2018, which Application is incorporated by reference
into this Agreement and is on file in the Orange County Department of Housing and
Community Development; and
WHEREAS, a first -time homebuyer for the purposes of this program is defined as any
low income household that has not owned a home within the past five (5) years including
15
II lijliijji['�'Jij I tl�I Jfilill ■�� � v� vo■ e 1!� ■ ■ DocuSign Envelope ID: 5C622784- 3DD9- 4F2B- 8D53- D3D3E1D35BD4 111 1�1�111ill�1�11�ll
RB6513 108 18158
households living in manufactured housing not permanently affixed to a foundation, or owner -
occupants of homes not feasible for rehabilitation and has lived or worked in Orange County for
at least one year prior to the home purchase; and
WHEREAS, as particularly described herein, the Property will be held by CHT,
ensuring affordability of the project dwelling unit for at least 99 years; and
WHEREAS, CHT has signed this Declaration agreeing to the terms of this Declaration,
its obligations pursuant to this Declaration and agreeing to the terms of the Development
Agreement between the County and CHT of even date; and
NOW, THEREFORE, in consideration of the mutual covenants, promises, and
representations contained herein, it is agreed between the parties hereto as follows:
SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER
CHT hereby represents, covenants and warrants as follows:
a. Subject to the requirements of the GRANT AGREEMENT, an unsigned copy of which
is Exhibit B hereto, and this Declaration, CHT may sell, transfer, or exchange the Property to a
non - profit fund, foundation, or corporation of like purpose which is organized and operated
exclusively for charitable and educational purposes and which has established its tax exempt
status under Section 501(c)(3) of the Internal Revenue Code, or to the County, but Owner shall
notify in writing and obtain the agreement of any buyer or successor or other person acquiring
the Property or any interest therein, that such acquisition is subject to the requirements of this
Declaration and to the requirements of the GRANT AGREEMENT and the Federal HOME
Investment Partnership Program. CHT agrees that County may void any sale, transfer, or
exchange of the Property or any portion of the Property if the buyer or successor or other person
fails to assume in writing the requirements of this Declaration and the requirements of the
GRANT AGREEMENT.
b. Contemporaneously with the execution, delivery and recording of this Declaration, CHT
will acquire good and marketable title to the Property, free and clear of any lien or encumbrance
(except encumbrances created pursuant to this Declaration or other encumbrances permitted by
Orange County).
C. CHT warrants that it will not accept title to the Property subject to and will not execute
any other declaration with provisions contradictory to, or in opposition to, the provisions hereof,
and that in any event, the requirements of this Declaration are paramount and controlling as to
the rights and obligations herein set forth and supersede any other requirements in conflict
herewith.
a. This Declaration (and the terms of affordability specified herein) applies to the Property
immediately upon the recordation of this Declaration. CHT and all subsequent owners of the
L[et
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RB6513 109 19/58
Property shall comply with all covenants herein. This Declaration shall terminate ninety -nine
years after the Project completion date as specified in the GRANT AGREEMENT.
SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND
a. CHT shall cause this declaration and all amendments hereto to be recorded and filed in
the Office of the Register of Deeds of Orange County upon its execution. CHT shall pay all fees
and charges incurred in connection therewith.
b. CHT intends, declares and covenants, on behalf of itself and all future owners of the
Property during the term of this Declaration, that this Declaration and the covenants and
restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer
of the Property (1) shall be and are covenants running with the land, encumbering the Property
for the term of this Declaration, binding upon all present and future owners of the Property; (2)
are not personal covenants of Declarant; and (3) shall bind all present and future owners (and the
benefits shall inure to the County and any prospective owner of the Property) and its respective
successors and assigns during the term of this Declaration. For the term of this Declaration, each
and every contract, lease, deed or other instrument hereafter executed conveying the Property or
portion thereof shall expressly provide that such conveyance is subject to this Declaration,
provided, however, the covenants contained herein shall survive and be effective regardless of
whether such contract, lease, deed, or other instrument hereafter executed conveying the
Property or portion thereof provides that such conveyance is subject to this Declaration. It is
further the responsibility of CHT to rerecord this Declaration periodically and no less often than
one day less than every 30 years from the date hereof for the purpose of renewing the rights of
first refusal in the Property or portion thereof including any leasehold interest in the Property or
portion thereof. The County retains the right to, periodically and every 30 years after the first
recording of the Ground Lease created in Exhibit C hereof, register, with the Register of Deeds
of Orange County, a notice of preservation of the Restrictive Covenants on the Property as
provided in North Carolina General Statute § 4713-4 or any comparable preservation law in effect
at the time of the recording of the notice of preservation. It is the intent of this Section 3 of this
Declaration that the 99 year duration of this Declaration of Restrictive Covenants be
accomplished and that any future owner of the Property, CHT and Orange County will do what
is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41 -29 or any
comparable law purporting to extinguish, by the passage of time, preemptive rights in the
Property and by the Real Property Marketable Title Act or any comparable law purporting to
extinguish, by the passage of time, non possessory interests in real property. Any future owner of
the Property, CHT and Orange County will to do what each must do to accomplish the 99 year
duration of this Declaration of Restrictive Covenants.
SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS
a. At the time of resale of the project dwelling unit, CHT will convey a housing unit to
qualified homebuyer. Each housing unit will consist of a 99 year Ground Lease (renewable for
an additional 99 years) to the project dwelling unit. The Ground Lease, the form of which is
Exhibit C hereto, provides for the long term affordability (at least 99 years) of the housing unit
and provides remedies to insure the long term affordability of the housing unit. CHT hereby
17
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RB6513 110 20158
declares and covenants, on behalf of itself and all future owners of the Property, that, during the
term of this Declaration, the County is a third party beneficiary of and successor to each and
every remedy intended to insure the long term affordability of the housing unit that is provided
for in the Ground Lease and may, in the event of the failure or default of the Lessor in the
Ground Lease to insure the long term affordability of the housing unit as provided for in the
Ground Lease, exercise all rights and remedies available to the Lessor in the Ground Lease for
that purpose.
b. CHT covenants that it will not knowingly take or permit any action that would result in a
violation of the affordability requirements of the GRANT AGREEMENT. Orange County,
together with any future owner of the Property may execute and record any amendment or
modification of this Declaration necessary to insure the successful completion of the Project and
the long term affordability (at least 99 years) of the housing units on the Property and such
amendment or modification shall, to the extent permitted by law, either relate back to the date of
recording of this Declaration or not as necessary to carry out the intent of this Declaration, and
be binding on third parties granted rights under this Declaration. CHT expressly covenants and
agrees to rerecord this Declaration periodically and no less often than one day less than every 30
years from the date hereof for the purpose of renewing the Lessor's option to purchase and right
of first refusal, that are contained in the Exhibit C Ground Lease, in the Property or portion
thereof including any leasehold interest in the Property or portion thereof.
C. CHT acknowledges that the primary purpose for requiring compliance by CHT with
restrictions provided in this Declaration is to assure compliance with the long term affordability
requirements of the HOME INVESTMENT PARTNERSHIP PROGRAM, AND BY REASON
THEREOF, CHT, IN CONSIDERATION FOR RECEIVING HOME INVESTMENT
PARTNERSHIP PROGRAM FUNDS FOR THE PROPERTY, HEREBY AGREES AND
CONSENTS THAT THE COUNTY SHALL BE ENTITLED, FOR ANY BREACH OF THE
PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY
LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC PERFORMANCE CHT' S
OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT
JURISDICTION, WITH VENUE IN ORANGE COUNTY. CHT hereby further specifically
acknowledges that the beneficiaries of CRT's obligations hereunder cannot be adequately
compensated by monetary damages in the event of any default hereunder. If legal costs are
incurred by the County, such legal costs, including attorney fees and court costs (including costs
of appeal), are the responsibility of, and may be recovered from the CHT.
SECTION 5 MISCELLANEOUS
a. Severability. The invalidity of any clause, part, or provision of this Declaration shall not
affect the validity of the remaining portions thereof.
E
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RB6513 111 21/58
b. Notices. Any Notice shall be in writing and shall be given by depositing the same
in the United States mail, post -paid and registered or certified, and addressed to the party to be
notified, with return- receipt requested, or by delivering the same in person to an officer or
principal of such party. Notice deposited in the mail in the manner herein above described shall
be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless
changed as hereinafter provided, be as follows:
i. To the County: Orange County
c/o Housing and Community Development Department
P.O. Box 8181
Hillsborough, NC 27278
ATTN: Director
ii. To Declarant: To CHT:
Community Home Trust
109 Conner Drive, Suite 1000
Chapel Hill, NC 27514
ATTN: Executive Director
C. Governing Law. This Declaration shall be governed by the laws of the State of North
Carolina and, where applicable, the laws of the United States of America.
IN WITNESS WHEREOF, CHT has caused this Declaration to be signed by its duly
authorized representative, on the day and year first above written.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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RB6513 112 22/58
Community Home Trust, Inc.
Do
cuSigned by:
�°;
By ut V bWu"
4 C9 3A4 1A4 AB...
NORTH CAROLINA
ORANGE COUNTY
President
I, , Notary Public in and for the above named County and
State, do hereby certify that on this day personally appeared before me with
whom I am personally acquainted, who, being by me duly sworn, says that he is
of Community Home Trust, Inc., a North Carolina corporation, and that by authority duly given
and as the act of the corporation, the foregoing instrument was signed by him on behalf of the
corporation.
Witness my hand and notarial seal, this the day of
Notary Public
My commission expires:
20
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RB6513 113 23158
EXHIBIT A
Property Description
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RB6513 114 24/58
EXHIBIT B
Grant Agreement
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/ill III
RB6513 115 25/58
EXHIBIT C
Ground Lease Agreement
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RB6513 116 26/58
Community Home Trust GROUND LEASE
(Revised 4- 11 -12)
(New PEP 9/14/16)
(Revised 1- 27 -16)
THIS LEASE ( "this Lease" or "the Lease ") made and entered into this day of
, 20 , by and between the COMMUNITY HOME TRUST
( "CHT" or "Lessor ") and ( "Lessee " ").
WHEREAS, CHT is organized for the purpose of developing and preserving decent,
affordable housing opportunities for low and moderate income people who might otherwise not
be able to afford to own a home; and
WHEREAS, CHT uses long term land leases as a tool to provide and preserve affordable
housing; and
WHEREAS, the Lessee enters into this Lease to obtain those benefits to which the Lessee
is entitled under the Lease and to further the charitable purposes of the Lessor; and
WHEREAS, Lessor and Lessee recognize the special nature of the terms and conditions
of this Lease, and each of them, with the independent and informed advice of legal counsel,
freely accepts these terms and conditions, including those terms and conditions that may affect
the marketing and resale price of the Leasehold Estate;
NOW THEREFORE, in consideration of the foregoing recitals, of,mutual promises of
Lessor and Lessee, and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Lessor and Lessee agree as follows:
ARTICLE 1: Letters of Stipulation and Acknowledgment
1.1 LETTERS: In order to assure that Lessee fully understands and accepts the unique
nature of this Lease, Lessor requires that Lessee and Lessee's Counsel review and sign the
Lessee's Letter of Stipulation and Lessee's Attorney's Letter of Acknowledgement in the forms
attached to this lease as Exhibits A and B.
ARTICLE 2: Demise of Leased Premises
2.1 LEASED PREMISES: Lessor leases to Lessee and Lessee hires from Lessor, the
Land and any improvements thereon (referred to in this Lease as the "Leased Premises ")
described in the attached Exhibit C: LEASED PREMISES. Lessee takes the Leased Premises
"as is" as of the date of this Lease.
DocuSign Envelope ID: 5C622784- 3DD9- 4F2B- 8D53- D3D3E1 D35BD4
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ARTICLE 3: Duration of Lease
3.1 TERM: The term of this Lease will be 99 years, commencing on ,
20 and terminating on , 2 , unless terminated sooner or extended as
provided below.
3.2 LESSEE'S OPTION TO EXTEND: Lessee may extend the term of this Lease for one
(1) additional period of 99 years upon the following conditions:
a. This Lease must be in effect at the time notice of exercise is given and on the last day
of the term.
b. Lessee must not be in default on any term of this Lease or on any term of a Permitted
Mortgage (as hereinafter defined).
c. Not more than 365 nor less than 180 days before the last day of the current term,
Lessor will give Lessee written notice, stating the date of expiration of the Lease, describing any
changes that Lessor intends to make to the terms of the Lease as permitted above, and reiterating
the conditions for renewal ( "the Expiration Notice ").
d. The parties will execute a memorandum of lease in recordable form, acknowledging
the fact that the option has been exercised and otherwise complying with the requirements of law
for an effective memorandum of lease.
3.3 CHANGE OF LESSOR; LESSEE'S RIGHT TO PURCHASE: Subject to the
requirements of any restrictions or rights to purchase Lessor may have granted any governmental
entity which will take priority over the provisions of this subsection, this Lease will continue in
effect regardless of any change in the ownership of the Leased Premises. However, if Lessor
attempts to convey the Leased Premises to any person or entity other than a nonprofit
corporation, charitable trust, governmental agency or other similar entity sharing the goals
described in the Recitals above (or as security for a mortgage loan), the Lessee will have a right
of first refusal to purchase the Leased Premises. This right will be as specified in the attached
Exhibit D: FIRST REFUSAL. Any sale or other. transfer contrary to this section 3.3 will be null
and void.
ARTICLE 4: Use of Leased Premises
4.1 RESIDENTIAL USE ONLY: Lessee and any person occupying the Leased Premises
will use the Leased Premises only for residential purposes and the accessory uses permitted
under the applicable zoning regulations and will abide by any applicable declaration of
restrictions described in the attached Exhibit E: SPECIAL USE RESTRICTIONS.
4.2 RESPONSIBLE USE AND COMPLIANCE WITH LAW AND COVENANTS:
Lessee will maintain the Leased Premises in good, safe, and habitable condition in all respects,
except for normal wear and tear, in full compliance with all applicable laws and regulations and
homeowners regulations applicable to the Leased Premises.
4.3 RESPONSIBLE FOR OTHERS: Lessee will be responsible for the use of the Leased
Premises by all residents and their families, friends and visitors and anyone else using the Leased
Premises with their consent and will make all such people aware of the spirit, intent and
appropriate terms of this Lease.
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4.4 OCCUPANCY: Lessee will physically occupy the Leased Premises full time unless
precluded from doing so by doctor certified medical needs or otherwise agreed by Lessor.
4.5 INSPECTION: Lessor may conduct routine inspections of the Leased Premises from
time to time to confirm that Lessee is in compliance with Section 4.2. of this lease. Lessor will
give Lessee notice of its intention to conduct a routine inspection at least 72 hours in advance of
the inspection and will conduct routine inspections only at reasonable times and in a reasonable
manner. Lessor may inspect any portion of the Leased Premises at any time without notice to
Lessee in the event of an emergency.
4.6 LESSEE'S RIGHT TO PEACEFUL ENJOYMENT: So long as Lessee fulfills his /her
obligations under this Lease, he /she will have the peaceful and undisturbed enjoyment of the
Leased Premises.
ARTICLE 5: Ground Lease Fee
5.1 GROUND LEASE FEE: In consideration of the continued use and occupancy of the
Leased Premises, Lessee shall pay to Lessor a monthly ground lease fee (the Ground Lease Fee),
established at the commencement of this lease to be
dollars ($ ), which is equal to:
(a) A Use Fee established at the commencement of this lease to be
Dollars ($ ); plus
(b) A Stewardship Fee, established at the commencement of this lease to be
Dollars ($ ).
Stewardship Fee: Lessor will collect a Stewardship Fee as part of the Ground Lease Fee which
it will hold in a common reserve fund along with Stewardship Fees paid by other ground lease
tenants to fund capital replacement /repair projects to the Leased Premises as set in Exhibit F.
The existence of the reserve fund does not alter Lessee's repair and maintenance obligations
under this Lease.
5.2 PAYMENT OF GROUND LEASE FEE: The Ground Lease Fee will be due and
payable on the first day of each month. If the Lease commences on a day other than the first of
the month, a pro -rata portion of the Ground Lease Fee will be paid for the balance of the month
at the time the Lease is executed.
If there are any unpaid Ground Lease Fees at the time this Lease is terminated or assigned, the
Lessee will pay Lessor the unpaid balance, plus all applicable late fees and penalties, out of
Lessee's proceeds, if any, from the sale of the Leasehold Estate.
Lessee agrees that the Ground Lease Fee will be collected by Lessor through automatic drafting
of the Lessee's bank account. If Lessee fails to establish automatic drafting for the fee, or
discontinues automatic drafting at any time, Lessor will add a Processing Fee of twenty dollars to
the Ground Lease Fee for each month that automatic drafting is not in place. This Processing
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RB6513 119 29/58
Fee may be increased yearly to take into account inflation. The maximum increase that may be
imposed in any single year is 5 %.
5.3 REDUCTION, DELAY OR WAIVER OF GROUND LEASE FEE: Lessor may
reduce, delay, or waive entirely the Ground Lease Fee from time to time for the purpose of
ensuring affordable monthly housing costs for the Lessee. Any reduction, delay, or waiver must
be in writing and signed by Lessor.
5.4 ADJUSTMENT OF GROUND LEASE FEE: If the provisions of Article 10 or
Article 11 regarding transfers of the Lessee's interest in the Leased Premises or Section 4.4
regarding occupancy are suspended or invalidated for any period of time, then during that time
the Ground Lease Fee will be increased to the fair rental value of the Leased Premises as
determined by independent appraisal for use not restricted by the provisions of the suspended
portions of the Lease.
The Ground Lease Fee will be recalculated yearly to take into account inflation and other
factors as Lessor may reasonably choose. The maximum increase that may be imposed in any
single year is 5 %.
ARTICLE 6: Taxes and Assessments
6.1 TAXES AND ASSESSMENTS: Lessee will be responsible for payment of all taxes,
utility charges, homeowner's association assessments, and governmental assessments that relate
to the Leased Premises even if the bills are issued in the name of Lessor. LESSEE AGREES TO
have all homeowner's association assessments and /or dues paid by automatic draft, if available at
no additional cost to the homeowner.
6.2 LESSEE'S RIGHT TO CONTEST: Lessee may contest the amount or validity of
any taxes related to the Leased Premises. Lessor will, upon written request by Lessee, join in the
proceedings if Lessor determines it is necessary for Lessee to raise a valid objection to the tax in
question. Lessee will bear all costs of the tax contest proceeding.
6.3 PAYMENTS IN EVENT OF DELINQUENCY: If Lessee fails to pay the taxes or
other charges specified in section 6.1 above when due, Lessor may but is not obligated to pay
taxes or charges and increase the Ground Lease Fee by the amount of the taxes or charges paid.
6.4 PROOF OF COMPLIANCE: If requested by the other party, the party paying any
tax, assessment or charge required or permitted under this lease will provide the other with
copies of receipts documenting payment.
ARTICLE 7: Ownership Rights
7.1 EXCLUSIVE RIGHTS TO LEASED PREMISES: Lessee will have the "Ownership
Interest" in the Leased Premises, defined as the exclusive right during the term of this Lease to
occupy and possess the land, buildings, structures, and other improvements, and fixtures attached
to any improvements located on the Leased Premises, at the time of the execution of this Lease
or constructed by Lessee during the term of this lease. Lessee will not sever or remove the
Improvements from the Leased Premises.
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RB6513 120 30158
7.2 CONSTRUCTION AND ALTERATION: Lessee may make new improvements or
alter existing improvements on the Leased Premises upon the following conditions:
(a) Lessee will bear all costs of construction;
(b) All construction will be performed in a worker like manner and in compliance with all
applicable laws and regulations;
(c) All construction will be consistent with the permitted uses set forth in Article 4;
(d) Lessee will furnish to Lessor a copy of any plans and all building permits for the
construction prior to commencing construction.
(e) Lessee may not change the exterior building envelope of the Improvements without
the prior written consent of Lessor.
Lessee acknowledges that he /she will not recover any increase in the market value of the
Property resulting from any improvements he /she might make on resale of the Property.
7.3 PROHIBITION OF LIENS: Lessee will procure the record discharge of any claim of
lien including but not limited to mechanic's or materialman's claim of lien which might be filed
against the Leased Premises within sixty (60) days of its filing. If Lessee fails to procure the
record discharge of a claim of lien within the time allowed, Lessor may, but is not obligated to,
discharge the same by paying the amount in question. Lessee may contest the validity of any
lien asserted so long as Lessee furnishes a bond in an amount sufficient to release the Leased
Premises from the lien. Any amounts paid by Lessor hereunder in respect of the liens will be
deemed an additional Ground Lease Fee payable by Lessee upon demand.
7.4 MAINTENANCE AND SERVICES: Lessee will, at Lessee's sole expense, maintain
the Leased Premises as required by section 4.2 above. Lessor will not be required to furnish any
services or facilities, including but not limited to heat, electricity, air conditioning, or water, or to
make any repairs to the Leased Premises, and Lessee hereby assumes the sole responsibility for
furnishing all services or facilities.
7.5 DISPOSITION OF LEASED PREMISES UPON EXPIRATION OF LEASE TERM:
Upon the expiration of the term of this Lease as such term may be extended or terminated in
accordance with this Lease, Lessee will surrender the Leased Premises to the Lessor. The
exclusive right to possess the Leased Premises will thereupon revert to Lessor, provided,
however, that Lessor will promptly pay to Lessee as consideration for the Leased Premises an
amount equal to Lessor's Resale Formula Price calculated in accordance with Article 10 below,
as of the time of reversion of ownership, less the total amount of any unpaid Ground Lease Fee
including any charges that may have been added to the Ground Lease Fee in accordance with this
Lease.
ARTICLE 8: Financing
8.1 PERMITTED MORTGAGE: Lessee may mortgage his or her interest in the Leased
Premises with the written consent of Lessor. Lessor will be required to consent to a proposed
mortgage only if:
(a) All mortgage documents, which must be submitted to Lessor ten (10) days in advance
of closing, are in a form acceptable to Lessor;
(b) Lessee is not in default on any obligation under this Lease;
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RB65 3 121 31/58
(c) The proposed loan documents comply with the requirements for a Permitted Mortgage
set out in the attached Exhibit G: PERMITTED MORTGAGES, the terms, and conditions of
which are incorporated herein by reference. Lessor, Lessee, each Permitted Mortgagee and their
respective successors in interest may rely upon and shall be bound by the provisions of the
"Permitted Mortgages" exhibit and any Permitted Mortgage approved by Lessor.
Lessee will pay to Lessor at Lessor's option, as additional Ground Lease Fee, all fees,
costs, and expenses, including, without limitation, reasonable attorneys' fees, incurred by Lessor
in connection with any Permitted Mortgage.
8.2 REMOVAL OF CERTAIN PROVISIONS PURSUANT TO FORECLOSURE: In
the event of foreclosure sale by a Permitted Mortgagee or the delivery of a conveyance to a
Permitted Mortgagee in lieu of foreclosure in accordance with the provisions of the Lease, at the
election of the Permitted Mortgagee the provisions of Article 10, sections 10.1 through 10.13
will be deleted and thereupon will be of no further force or effect as to only so much of the
Security so foreclosed upon or transferred.
8.3 LESSOR'S RIGHT TO PROCEEDS IN EXCESS OF RESALE FORMULA PRICE:
Lessee acknowledges that it would defeat Lessor's goal of providing affordable housing for the
long term if Lessee could realize more than the Resale Formula Price established in Article 10
as the result of the foreclosure of a Permitted Mortgage. Accordingly, Lessee irrevocably
assigns to Lessor any and all rights Lessee might have in the proceeds of a foreclosure sale of the
Leasehold Interest in excess of the Resale Formula Price after satisfaction of the lien of any
Permitted Mortgagee. Lessee instructs the Permitted Mortgagee or any party conducting any-
sale to pay the amount of said excess proceeds directly to Lessor, but the Permitted Mortgagee
and its trustee will have no liability to Lessor or Lessee for the failure to distribute excess
proceeds to Lessor. If, for any reason, the excess proceeds are paid to Lessee, Lessee agrees to
pay the amount of the excess proceeds to Lessor promptly.
ARTICLE 9: Liability, Insurance, Damage and Destruction, Eminent Domain
9.1 LESSEE'S LIABILITY: Lessee assumes sole responsibility and liability to all
persons and authorities related to the possession, occupancy, and use of the Leased Premises and
will defend, indemnify, and hold Lessor harmless against all liability and claims of liability for
injury or damage to person or property from any cause on or about the Leased Premises. Lessee
waives all claims against Lessor for injury or damage arising from the Leased Premises except
for claims arising out of Lessor's gross negligence or intentional wrongdoing.
9.2 PAYMENT BY LESSOR: If Lessor is required to pay any sum that is the Lessee's
responsibility or liability, the Lessee will reimburse the Lessor for the payment and for
reasonable expenses caused thereby.
9.3 INSURANCE: Lessee will keep all Improvements continuously insured against loss
or damage by fire and other hazards for the full replacement value of the Improvements and will
maintain premises liability insurance covering the Land and Improvements insuring Lessee
against all liability assumed under this Lease, as well as all liability imposed by law. The hazard
and liability insurance policies will name both Lessee and Lessor as "named insured's" so as to
DocuSign Envelope ID: 5C622784- 3DD9- 4F2B- 8D53- D3D3E1 D35BD4
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create the same liability on the part of insurer as though separate policies had been written for
Lessee and Lessor.
Lessee will provide Lessor with copies of all policies and renewals of policies. All
policies will also contain endorsements providing that they will not be cancelled, reduced in
amount or coverage, or otherwise modified by the insurance carrier without at least thirty (30)
days' prior written notice to Lessor. Lessor will be entitled to participate in the settlement or
adjustment of any losses covered by the policies of insurance.
9.4 DAMAGE OR DESTRUCTION: Subject to the insurance provisions of any
declaration of covenants or unit ownership which will control over this lease, if the
Improvements are damaged or destroyed by fire or other casualty, Lessee will promptly restore
the Improvements to their condition preceding the damage and continue to pay the Ground Lease
Fee unless
a. The full repair or restoration is not reasonably practicable or
b. The available insurance proceeds of the insurance policies maintained in
accordance with Section 9.3 are less than eighty percent (80 %) of the cost of the repair or
restoration.
In either event, Lessee may terminate this lease after giving Lessor written notice within sixty
(60) days of the loss and allowing Lessor sixty (60) days from the receipt of the notice to either
a. Seek an adjustment from the insurer to increase the amount of insurance proceeds
to cover at least eighty percent (80 %) of the cost of the repairs or restoration, or
b. Make arrangements to use the available proceeds to restore or replace the
damaged Improvements with Improvements of reasonably equivalent quality with a floor area of
at least eighty percent (80 %) of the damaged Improvements.
If Lessor fails, within sixty days of receipt of Lessee's notice, to give Lessee notice that it
has made arrangements to increase the insurance proceeds or restore or replace the
Improvements as specified above, this Lease will terminate and the proceeds of the insurance
maintained by Lessee will be paid in the following priority:
a. To the payment of the expenses of collection of the proceeds;
b. As may be permitted in any Permitted Mortgage then encumbering the Lessee's
leasehold estate;
C. To the Lessee up to the then applicable Resale Formula Price as of immediately
prior to the casualty calculated pursuant to Article 10.
d. The balance of the proceeds, if any, to Lessor.
9.5 EMINENT DOMAIN AND PUBLIC DEDICATION: If the entire Leased Premises
are taken by eminent domain, this lease will terminate as of the date the Lessee is required to
surrender possession of the Leased Premises, and the condemnation award will be allocated in
the same manner as a casualty loss as set out in Section 9.4.
If less than the entire Leased Premises are taken, Lessor will in its discretion allocate
some or all of the proceeds to enable Lessee to repair and restore that which may remain thereof
while retaining the balance of the award. If the Lessor determines that the Leased Premises
cannot be restored to a residential use consistent with this Ground Lease, the award will be
distributed in accordance with Section 9.4. The prosecution or defense of any proceedings in
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RB6513 123 33/58
which a party to this lease seeks damages for a taking will be at the expense of the party
asserting the claim or defense. The parties agree to be named as a party to these proceedings if
necessary for the other to assert a claim or defense so long as the party asserting the claim or
defense agrees to reimburse the other for any costs it might incur as a first charge against any
award.
9.6 RELOCATION OF LESSEE: If this Lease is terminated as the result of damage,
casualty or taking, Lessor will take reasonable steps to grant Lessee a leasehold interest in other
tracts it might own, if any, and Lessee agrees to contribute any proceeds or award received by
Lessee to purchase or develop the other property and enter a Lease substantially similar to this
one. In no event will Lessor be required to terminate the tenancy of any other lessee or withhold
any property from development or rental in order to accommodate lessee and Lessor's failure to
supply similar leasehold premises or any premises whatsoever will not give rise to any cause of
action by Lessee against Lessor for damages, specific performance or other remedy.
ARTICLE 10: Transfer, Sale, or Disposition of Leasehold Interest
10.1 INTENT: Lessee acknowledges that the terms of this Lease, and in particular of this
Article 10, are intended to preserve the affordability of the Leasehold for lower and moderate
income households.
10.2 TRANSFERS TO QUALIFIED BUYERS: While living, Lessee may transfer
his/her interest in the Leased Premises only to
a. Lessor or
b. a Qualified Buyer as defined below or
c. a Permitted Mortgage Holder in lieu of foreclosure.
All such transfers will be subject to Lessor's review and purchase option rights set forth
in this Article 10. Any attempted transfer not authorized under this Article 10 will be null and
void.
"Qualified Buyer" will mean a person or group of persons who meet the resident
selection requirements of CHT described in the attached Exhibit H: CHT RESIDENT
SELECTION REQUIREMENTS and /or those of any governmental entity providing funding for
CHT, and whose household income does not exceed percent C_ %) of the
median household income for the Standard Metropolitan Statistical Area that encompasses
Orange County, North Carolina, as calculated and adjusted for household size from time to time
by the U.S. Department of Housing and Urban Development (HUD) or any successor.
10.3 TRANSFER TO LESSEE'S HEIRS/DEVISEES: So long as the recipient is willing
to assume the Lessee's obligations under this lease and sign a Letter of Stipulation and a Letter
of Acknowledgment of legal counsel (similar to those described in Article 1 of this Lease),
Lessee may leave his or her interest in the Leasehold Estate by will or allow it to pass by
intestate succession to the following:
a. The spouse of the Lessee; or
b. The child or children of the Lessee; or
I
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RB65-3 124
C. Member(s) of the Lessee's household, including a domestic partner, who resided
upon the Leased Premises for at least one year prior to the Lessee's death.
Any other successor to Lessee's leasehold estate must qualify as a Qualified Buyer. If the
successor does NOT qualify as a Qualified Buyer, he /she will not be entitled to possession of the
Leased Premises and t must transfer his/her interest in the Leased Premises in accordance with
the provisions hereof.
10.4 LESSEE'S NOTICE OF INTENT TO SELL: Lessee will notify Lessor in writing of
his /her desire to sell his/her interest in the Leased Premises.
Upon receiving Lessee's Intent to Sell Notice, Lessor will have 5 business days in
which to make available to Lessee a list of approved home inspectors who may perform the
Professional Inspection required by section 10.5 of this lease.
10.5 PROFESSIONAL INSPECTION: Lessee will commission an inspection of the
Leased Premises (the Professional Inspection) by a home inspector acceptable to Lessor. Lessor
will pay for the Professional Inspection.
10.6 REPAIR REQUIREMENTS: Within 5 business days after Lessor receives the report
from the Professional Inspection, Lessor will contact Lessee to schedule a Lessor's inspection of
the Leased Premises (Lessor's Inspection). Within 5 business days of Lessor's Inspection,
Lessor will make available to Lessee a list of repair requirements which must be met by Lessee
(the Repair Requirements). Lessee will be expected to bear 100% of the costs of the Repair
Requirements. In preparing this list, Lessor will reference the standards described in Exhibit I:
REPAIR REQUIREMENTS.
10.7 APPRAISAL: At its discretion, Lessor may also commission an appraisal (the
Appraisal) of the Property within 5 business days after receiving the report from the Professional
Inspection. Lessor will pay for the Appraisal. The Appraisal will be performed by a licensed
appraiser acceptable to Lessor and Lessee. The Appraisal will state the market value of the
Property, rather than the leasehold value. Copies of the Appraisal are to be provided to both
Lessor and Lessee
10.8 REPAIR INSPECTION: After Lessee has completed the Repair Requirements, he
or she will contact Lessor to schedule an inspection of the completed upfits and repairs. Lessor
will certify when the Repair Requirements have been completed to Lessor's satisfaction.
10.9 LESSOR'S PURCHASE OPTION:
a. Voluntary Sale: Within (five) 5 business days of certifying Lessee's completion of the
Repair Requirements, Lessor will prepare its standard "Resale Agreement" document and notify
Lessee that it is available to sign. When Lessee signs and returns the Resale Agreement, Lessor
will have the option to purchase Lessee's interest in the Leased Premises ( "the Purchase
Option ") at the Resale Formula Price calculated as set forth below.
The Purchase Option is designed to further the purpose of preserving the affordability of
the Leasehold Estate for succeeding Qualified Buyers while taking fair account of the investment
by the Lessee.
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Lessor may exercise the Purchase Option upon giving Lessee written notice of the
election ( "the Notice of Exercise of Option ") within forty -five (45) days of the receipt of the
Resale Agreement signed by Lessee. Lessor, or any Qualified Buyer to whom Lessor may
assign the Purchase Option, will have sixty days from the exercise of the Purchase Option in
which to close the purchase of Lessee's interest in the Leased Premises. Unless Lessor and
Lessee agree to extend either deadline, Lessee will be free to sell his/her interest in the Leased
Premises in accordance with Section 10.10 if Lessor or its assignee fails to exercise the option or
close the purchase within the time allowed.
b. Foreclosure. At any time after the commencement of foreclosure proceedings under a
Permitted Mortgage, Lessor may purchase the Lessee's Leasehold Interest for the balance due
under the Permitted Mortgage.
10.10 IF PURCHASE OPTION EXPIRES: If the Purchase Option expires and Lessor
fails to complete the purchase within the period allowed by section 10.9 above, Lessee may sell
his or her interest in the Leased Premises through Lessor to any Qualified Buyer, for not more
than the then applicable Resale Formula Price.
10.11 PURCHASE OPTION PRICE: The Purchase Option Price shall be the lesser of
(a) the value of the Property as determined by the Appraisal, should one have been commissioned
and conducted as provided in 10.7 above, or (b) the price calculated in accordance with the formula
described below (the Resale Formula Price).
10.12 CALCULATION OF THE RESALE FORMULA PRICE: The Resale Formula
Price will be equal to the Lessee's Purchase Price, as stated below, plus the calculated appreciation
of the Lessee's Investment Basis (as defined below). The appreciation amount will be the
percentage- change in the Median Family Income (MFI), as published by the US Department of
Housing and Urban Development (HUD), for the metropolitan statistical area (MSA) that includes
Orange County, from the date of purchase to the date of the resale subject to a minimum annual
appreciation rate of 0.00% and a maximum annual appreciation rate of 1.00 %. Appreciation for
partial years will be prorated to the date of the calculation.
The published MFI published by HUD as of the, date of purchase is $
Lessee's Purchase Price: The parties agree that the Lessee's Purchase Price for the leased
premises as of the commencement of the term of this Lease is $
Lessee's Investment Basis: The Lessee's Investment Basis is calculated in Exhibit J:
INVESTMENT BASIS. The parties agree that the Lessee's Investment Basis in the leased
premises as of the commencement of the term of this Lease is $
10.13 RIGHT TO PURCHASE IN LIEU OF OPTION: If the provisions of the purchase
option set forth in this Article 10 become unenforceable for any reason, Lessor will nevertheless
have a right to purchase the interest in the Leased Premises at the highest documented bona fide
purchase price offer made to Lessee as specified in the exhibit D: RIGHT TO PURCHASE IN
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RB6513 126 36!58
LIEU OF OPTION. Any sale or transfer contrary to this section, when applicable, will be null and
void.
ARTICLE 11: Assignment and Sublease
11.1. Except as otherwise provided in Article 8 (including Exhibit G) and Article 10,
Lessee may not sublease, sell, or otherwise convey any of Lessee's rights under this Lease
without the prior written consent of the Lessor which the Lessor may withhold in its own
discretion.
ARTICLE 12: Default
12.1 DEFAULT BY LESSEE: It will be an event of default if Lessee fails to abide
by any material term or condition in this Lease, or if Lessee fails to pay the Ground Lease Fee or
other charges required by the terms of this Lease, a permitted mortgage, or any relevant owner's
association declaration and the failure is not cured by Lessee or a Permitted Mortgagee within
thirty (30) days after notice of the failure is given by Lessor to Lessee and Permitted Mortgagee.
Lessee will be assessed a late fee for any payment, including ground lease fees, that
Lessor does not receive within thirty days of its due date. The late fee will be 10% of any past
due payment. For each additional 30 days that the payment remains delinquent, Lessor will
charge an additional late fee which will be 10% of the original past due amount.
12.2 TERMINATION, FORFEITURE AND MODIFICATION OF LEASE: There will
be no termination, forfeiture, or modification of the Lease without the prior written consent of
any Permitted Mortgagee or until Permitted Mortgagee has failed to object to the intended action
for more than thirty days after Lessor has sent Permitted Mortgagee written notice of its intended
action. In the case of any of the events of default described above and with the written consent
of any Permitted Mortgagee, and following the giving of any required notice of default and the
failure of Lessee to cure the default within the applicable cure period, Lessor may give notice of
the termination of this Lease to Lessee and initiate summary ejectment proceedings allowing
Lessor to enter and retake possession of the entire Leased Premises. If this Lease is terminated
by Lessor, or if Lessor reenters the Leased Premises after an Event of Default, the Lessee agrees
to pay and be liable for any unpaid Ground Lease Fee, damages which may be due or sustained
prior to or in connection with the termination or reentry, and all reasonable costs, fees and
expenses (including, without limitation, reasonable attorneys' fees) incurred by Lessor in pursuit
of its remedies under this Lease.
If Lessor elects to terminate the Lease and a Permitted Mortgage remains outstanding, a
new Lease will automatically be created between the Lessor and the Permitted Mortgagee, which
Lease will be for the remainder of the term of the Lease, with the same priority thereto
12.3 DEFAULT BY LESSOR: Lessor will in no event be in default in the performance
of any of its obligations under the Lease unless and until Lessor has failed to perform the
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RB6513 127 37158
obligations within thirty (30) days, or the additional time as is reasonably required to correct any
default, after notice by Lessee to Lessor properly specifying Lessor's failure to perform any the
obligation.
ARTICLE 13: Arbitration
13.1 ARBITRATION PROCESS: Should any grievance or dispute other than a default
on a monetary term arise between Lessor and Lessee concerning the terms of this Lease that
cannot be resolved by normal interaction, the following arbitration procedure will be used.
Lessor or Lessee will give written notice to the other of its selection of a disinterested
arbitrator. Within fifteen (15) days of the receipt of this written notice, the other party may give
written notice to the first party appointing a disinterested arbitrator of its own choice. These two
arbitrators will select a third arbitrator. If the other party fails to name an arbitrator within 15
days of receiving the notice from the first party, the arbitrator selected by the first party will be
the sole arbitrator.
The arbitrator or arbitrators will hold a hearing within thirty (30) days after the initial
written notice by the initiator of the arbitration process. At the hearing Lessor and Lessee will
have an opportunity to present evidence and question witnesses in the presence of each other. As
soon as reasonably possible, and in no event later than fifteen (15) days after the hearing, the
arbitration panel will make a written report to the Lessor and Lessee of its findings and
decisions, including a personal statement by each arbitrator of his/her decision and the reasons
for it. The arbitrators will decide the dispute or claim in accordance with the substantive law of
North Carolina and what is just and equitable under the circumstances. The decision and award
of the majority of the arbitration panel will be binding and final. Lessor and Lessee will share
the costs of arbitration equally.
ARTICLE 14: General Provisions
14.1 LES SEE' S MEMBERSHIP IN CHT: The Lessee under this Lease will
automatically be a regular voting member of the CHT.
14.2 NOTICES: Whenever this Lease requires either party to give notice to the other, the
notice will be given in writing and delivered in person or mailed, by certified or registered mail,
return receipt requested, to the party at the address set forth below, or the other address
designated by like written notice:
If to Lessor: Community Home Trust, President
PO Box 307
Carrboro, NC 27510
With copies to: David M. Rooks, III
PO Box 2208
Chapel Hill, NC 27515 -2208
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RB6513 128 38158
If to Lessee:
All notices, demands, and requests will be effective upon being deposited in the United
States Mail or, in the case of personal delivery, upon actual receipt.
14.3 NO BROKERAGE: Lessee warrants that it has not dealt with any broker other than
in connection with the consummation of this Lease, and in the event any
claim is made against Lessor relative to dealings with brokers other than ,
Lessee will defend the claim against Lessor with counsel of Lessor's selection and save harmless
and indemnify Lessor on account of loss, cost or damage which may arise by reason of any the
claim.
14.4 SEVERABILITY AND DURATION: If any part of this Lease is declared
unenforceable or invalid, the material will be read out of this Lease and will not affect the
validity of any other part of this Lease or give rise to any cause of action of Lessee or Lessor
against the other, and the remainder of this Lease will be valid and enforced to the fullest extent
permitted by law. It is the intention of the parties that their respective options to purchase and all
other rights under this Lease will continue in effect for the full term of this Lease and any
renewal thereof, and the options and other rights will be considered to be coupled with an
interest. In the event any the option or right will be construed to be subject to any rule of law
limiting the duration of the option or right, the time period for the exercising of the option or
right will be construed to expire ninety (90) years from the creation of the option or right in
question.
14.5 WAIVER: The waiver by Lessor at any given time of any term or condition of this
Lease, or the failure of Lessor to take action with respect to any breach of any the term or
condition, will not be deemed to be a waiver of the term or condition with regard to any
subsequent breach of the term or condition, or of any other term or condition of the Lease.
Lessor may grant waivers in the terms of this Lease, but the waivers must be in writing and
signed by Lessor before being effective.
The subsequent acceptance of Ground Lease Fee payments by Lessor will not be deemed
to be a waiver of any preceding breach by Lessee of any term or condition of this Lease, other
than the failure of the Lessee to pay the particular Ground Lease Fee so accepted, regardless of
Lessor's knowledge of the preceding breach at the time of acceptance of the Ground Lease Fee
payment.
14.6 LESSOR'S RIGHT TO PROSECUTE OR DEFEND: Lessor will have the right, but
will be under no obligation, to prosecute or defend, in its own or the Lessee's name, any actions
or proceedings appropriate to the protection of its title to, and Lessee's interest in, the Leased
Premises. Whenever requested by Lessor, Lessee will give Lessor all reasonable aid in any the
action or proceeding.
14.7 CONSTRUCTION: Whenever in this Lease a pronoun is used it will be construed to
represent either the singular or the plural, masculine or feminine, as the case will demand.
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14.8 CAPTIONS AND TABLE OF CONTENTS: The captions and table of contents
appearing in this Lease are for convenience only, and are not a part of this Lease and do not in
any way limit or amplify the terms or conditions of this Lease.
14.9 PARTIES BOUND: This Lease sets forth the entire agreement between Lessor and
Lessee with respect to the leasing of the Leased Premises. It is binding upon and inures to the
benefit of these parties and, in accordance with the provisions of this Lease, their respective
successors in interest, each of whom will be a third party beneficiary of the Lease entitled to rely
upon and enforce its provisions. This Lease may be altered or amended only by written notice
executed by Lessor and Lessee or their legal representatives or, in accordance with the
provisions of this Lease, their successors in interest. However, as long as the Lessee's interest in
the Leased Premises is encumbered by a Permitted Mortgage:
(a) There will be no modification of this Lease without the written approval of the
Permitted Mortgagee, which approval will not be unreasonably withheld or delayed. The
passage of thirty days after submittal to a Permitted Mortgagee of a proposed Lease amendment
without approval or disapproval by the Permitted Mortgagee will be deemed approval thereof.
(b) Unless (i) the Lessee is in default under the terms of this Lease, (ii) the Lessor has
notified the Lessee and the Permitted Mortgagee of the default as required in this Lease, and (iii)
the default has not been cured within the applicable cure period, there will be no termination,
surrender or forfeiture of this Lease or the Leased Premises without the written approval of the
Permitted Mortgagee. The passage of thirty days after submittal to a Permitted Mortgagee of
notice of intention to terminate the Lease without approval or disapproval by the Permitted
Mortgagee will be deemed approval thereof.
14.10 GOVERNING LAW: This Lease will be interpreted in accordance with and
governed by the laws of North Carolina. The language in all parts of this Lease will be; in all
cases, construed according to its fair meaning and not strictly for or against Lessor or Lessee.
14.11 RECORDING: The parties agree to execute a Memorandum of Lease. The
Memorandum of Lease will not set forth the rent or other charges payable by Lessee under this
Lease and will the expressly state that it is executed pursuant to the provisions contained in this
Lease, and is not intended to vary the terms and conditions of this Lease.
14.12 DISCLOSURE OF INFORMATION: Lessor and its successors in interest may
disclose information concerning Lessee and this Lease to any Permitted Mortgagee, to any
prospective Permitted Mortgagee, to their respective successors in interest, and to their
respective agents and employees. Any Permitted Mortgagee and its successors in interest may
disclose information concerning Lessee, this Lease, and any Permitted Mortgage to Lessor, to
Lessor's successors in interest, and to their respective agents and employees.
IN WITNESS WHEREOF, the parties have executed this lease at Chapel Hill, NC, on the day
and year first above written.
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President
NORTH CAROLINA
COUNTY
RB6513 130 40/58
I, , Notary Public for said County and State, certify that
personally came before me this day and acknowledged that he/
she is of Community Home Trust, a corporation, and that he /she
signed this instrument by authority duly given and as the act of the corporation.
Witness my hand and official stamp \seal, this the day of ,
20
Notary Public
Lessee:
Lessee:
NORTH CAROLINA
My Commission Expires:
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COUNTY
I, , Notary Public for said County and State, certify that
, personally came before me this day and
acknowledged the due execution of the foregoing instrument.
Witness my hand and official stamp \seal, this the day of ,
20
Notary Public My Commission Expires:
NORTH CAROLINA
COUNTY
Notary Public for said County and State, certify that
, personally came before me this day and
acknowledged the due execution of the foregoing instrument.
Witness my hand and official stamp \seal, this the day of ,
20
Notary Public My Commission Expires:
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■ Exhibit A: FORM: LETTER OF STIPULATION
Letter of Stipulation
To: COMMUNITY HOME TRUST ( "the CHT ")
Date:
This letter is given to CHT to become an exhibit to a Lease between the CHT and me. I will be
leasing a parcel of land and the home located on that parcel of land from CHT for the term of the
lease, which will give me an "ownership interest" in the property. I will therefore become what
is described here as a "CHT homeowner."
My legal counsel, , has explained to me the terms and
conditions of the Lease and other legal documents that are part of this transaction. I understand
the way these terms and conditions will affect my rights as a CHT homeowner, now and in the
future.
In particular I understand and agree with the following points.
One of the goals of the CHT is to keep CHT homes affordable for lower- income households
from one CHT homeowner to the next. I support this goal as a CHT homeowner and as a
member of the CHT.
The terms and conditions of my Lease will keep my home affordable for future "Qualified
Buyers" (as defined in the lease). If and when I want to sell my home, the lease requires that I
sell it either to the CHT or to another Qualified Buyer. The terms and conditions of the lease
also limit the price for which I can sell the home, in order to keep it affordable for the Qualified
Buyers.
It is also a goal of the CHT to promote resident ownership of CHT homes. For this reason, my
Lease requires that if I and my family move out of our home permanently, we must sell it. We
cannot continue to own it as absentee owners.
I understand that I can leave my home to my child or children or other members of my household
and that, after my death, they can own the home for as long as they want to live in it and abide by
the terms of the Lease, or they can sell it on the terms permitted by the Lease.
As a CHT homeowner and a member of the CHT, it is my desire to see the terms of the Lease
and related documents honored. I consider these terms fair to me and others.
Sincerely,
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■ Exhibit B: FORM: LETTER OF ACKNOWLEDGEMENT
Letter of Acknowledgment
I, , have been independently employed by
(hereinafter "the Client ") who intends to enter into a long term
ground lease with Community Home Trust for the land and home located at
In connection with the contemplated transaction I reviewed with the Client the following
documents relating to the transaction:
This Letter of Acknowledgment and a Letter of Stipulation from the Client
A proposed Ground Lease conveying the "Leased Premises" to the Client
Other written materials provided by the CHT.
The Client has received full and complete information and advice regarding this conveyance and
the foregoing documents. My advice and review has been given to reasonably inform the Client
of the present and foreseeable risks and legal consequences of the contemplated transaction.
The Client is entering the aforesaid transaction in reliance on her own judgment and upon her
investigation of the facts. The full and complete advice and information provided by me was an
integral element of the investigation.
0VroT
Title
Firm/Address
Date
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■ Exhibit C: LEASED PREMISES
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Insert legal description of area of Leased Premises and appurtenant title rights and obligations.
Reference all easements, rights, utilities access etc. associated with the Leased Premises
I ,
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■ Exhibit D: RIGHT TO PURCHASE IN LIEU OF OPTION
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Whenever any party under the Ground Lease will have a right to purchase as to certain property,
the following procedures will apply. If the owner of the property offering it for sale ( "Offering
Party ") will within the term of the Ground Lease receive a bona fide, third -party offer to
purchase the property that the Offering Party is willing to accept, the holder of the right of first
refusal (the "Holder ") will have the following rights:
a. Offering Party will give written notice of the offer ( "the Notice of Offer ") to Holder setting
forth (a) the name and address of the prospective purchaser of the property, (b) the purchase
price offered by the prospective purchaser and (c) all other terms and conditions of the sale.
Holder will have a period of forty -five (45) days after the receipt of the Notice of Offer ( "the
Election Period ") within which to exercise the right of first refusal by giving notice of intent to
purchase the property ( "the Notice of Intent to Purchase ") for the same price and on the same
terms and conditions set forth in the Notice of Offer. The Notice of Intent to Purchase will be
given in writing to the Offering Party within the Election Period.
b. If Holder exercises the right to purchase the property, the purchase will be completed within
sixty (60) days after the Notice of Intent to Purchase is given by Holder (or if the Notice of Offer
will specify a later date for closing, the date) by performance of the terms and conditions of the
Notice of Offer, including payment of the purchase price provided therein.
c. Should Holder fail to exercise the right of first refusal within the Election Period, then the
Offering Party will have the right (subject to any other applicable restrictions in the Ground
Lease) to go forward with the sale which the Offering Party desires to accept, and to sell the
property within one (1) year following the expiration of the Election Period on terms and
conditions which are not materially more favorable to the purchaser than those set forth in the
Notice. If the sale is not consummated within the one -year period, the Offering Party's right so
to sell will end and all the foregoing provisions of this section will be applied again to any future
offer, all as aforesaid. If a sale is consummated within the one -year period, the purchaser will
purchase subject to a renewed right to purchase in said property.
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■ Exhibit E: SPECIAL USE RESTRICTIONS
To be attached when necessary to stipulate use restrictions not included under Zoning
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■ Exhibit F: STEWARDSHIP FEE
Reserves collected through the Lessee's monthly Stewardship Fee are explicitly the property of
Lessor, but may only be used for the capital replacement needs of the Property. Lessor must
reserve the full amount of the funds for this purpose.
The Stewardship Fee Reserves will be administered by Lessor, and Lessor will decide which
capital replacement costs are eligible for the use of the reserves. Lessee may request release of
funds, and Lessor shall release funds at its sole discretion, if the requested use is found to be
necessary and in accordance with the Reserve's intended use. Specifically, the Stewardship Fee
reserves will be used for the replacement of the following capital systems:
ALL HOMES:
• The HVAC System
• The Water Heater
• Interior Floor Finishes
Covered UNLESS already covered by HOA:
• The Roof
• The Exterior Siding and Trim
Services Also Included in Stewardship Fee
• Routine Termite. Inspection and Continuous Termite Warranty
• Pressure Washing (only if required by HOA)
In communities with homeowner or condominium owner associations, a portion of the above
capital costs may be covered by the owner association dues. In this case, capital items that are
specifically the responsibility of the owner association are explicitly excluded from coverage
under the Stewardship Fee reserves and are not included in establishing your fee calculation.
Lessee's monthly Stewardship Fee will be adjusted to reflect coverage of these items under the
owner association dues.
Lessor will manage the above capital systems replacement needs in consultation with Lessee.
System components will be replaced with products of comparable quality and features. At
Lessor's discretion, during a system replacement Lessee may opt to replace components with
higher rather than comparable quality products. In this case, Lessee will pay the cost difference
between the comparable quality and the higher quality product.
It is incumbent upon the Lessee to notify Lessor immediately of any deficiencies in the above
capital systems. Damages resulting from failure to make prompt notice of deficiencies are the
responsibility of Lessee.
The Stewardship Fee Reserves are explicitly the property of Lessor, but may only be used for the
capital replacement needs of the Property as specified in this Exhibit F. Lessee acknowledges
that the Stewardship Fee Reserves are intended for the benefit of Lessee and all other CHT
lessees and will not be returned to Lessee upon the sale or transfer of the Leasehold Estate.
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Lessee may expect that up to the full amount of reserves will be available for capital replacement
needs but Lessee will bear capital replacement costs in excess of available Stewardship Fee
Reserves.
No later than September 30th of each year, Lessor will make available upon Lessee's request a
detailed report of Stewardship Fee Reserves transactions for the prior fiscal year.
Lessee agrees to attend a home maintenance class offered by Lessor after purchasing the
Leasehold Estate. Because regular home maintenance reduces long term repair costs, Lessor will
reduce the amount of Lessee's monthly Stewardship Fee by five dollars after Lessee has
completed the home maintenance class. Lessee may attend additional home maintenance
classes, but will not receive additional fee reductions.
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■ Exhibit G: PERMITTED MORTGAGES
The provisions set forth in this Exhibit are understood to be provisions of Article 8 of the Lease
to which the Exhibit is attached and in which the Exhibit is referenced. All terminology used in
this Exhibit will have the meaning assigned to it in the Lease.
1. A "Permitted Mortgage" as the term is used in Section 8.1 is a mortgage which is
approved in advance by Lessor and:
a. Runs in favor of either (1) an institutional lender such as, but not limited to, a
federal, state, or local housing finance agency, bank, savings and loan association, insured credit
union, an insurance company, a pension and /or profit- sharing fund or trust, or any combination
of the foregoing, the policies and procedures of which institutional lender are subject to direct
governmental supervision, or (2) a "community development financial institution ", or similar
nonprofit lender to housing projects for low and moderate income persons (as defined by
reference to the membership criteria for the National Association of Community Development
Loan Funds, a nonprofit corporation with its principal office located in Philadelphia,
Pennsylvania); and
b. Is a first lien on Lessee's Leasehold Estate (Lessor may, but is not obligated to,
approve a second lien on the Leasehold Estate); and
C. Provides that prior to accelerating the note secured by the mortgage and
commencing foreclosure proceedings, the Permitted Mortgage holder will give Lessor notice of a
default in any of the mortgagor's obligations and the right but not the obligation to cure the
default within 120 days after its receipt of the notice, provided that current payments due to the
holder are made during this period.
d. Provides that if after the cure period the holder intends to accelerate the note
secured by the Permitted Mortgage and /or initiate. foreclosure proceedings under the Permitted
Mortgage, the holder will first notify Lessor of its intention to do so and Lessor will have the
right, but not the obligation, to pay off or purchase the indebtedness secured by the Permitted
Mortgage and acquire the security interest within 30 days of the receipt of the notice; and
e. Provides that in the event of foreclosure sale by a Permitted Mortgagee or the delivery
of a deed to a Permitted Mortgagee in lieu of foreclosure, upon acquisition of the Lessee's
interest in the Leased Premises by the Permitted Mortgagee, the Permitted Mortgagee will give
the Lessor written notice of such acquisition and the Lessor will have an option to purchase the
Lessee's interest in the Leased Premises from the Permitted Mortgagee for the full amount owing
to the Permitted Mortgagee under the Permitted Mortgage; provided, however, that the Lessor
gives written notice to the Permitted Mortgagee of the Lessor's intent to purchase the Lessee's
interest in the Leased Premises within thirty (30) days following the Lessor's receipt of the
Permitted Mortgagee's notice of such acquisition of the Lessee's interest; further provided that
Lessor will complete the purchase of the Lessee's interest in the Leased Premises within sixty
(60) days of having given written notice of its intent to purchase; and provided that, if the Lessor
does not complete the purchase within such period, the Permitted Mortgagee will be free to sell
the Lessee's interest in the Leased Premises to another person;
2. LESSOR'S CONSENT TO PERMITTED MORTGAGE: Lessee must obtain Lessor's
consent to a mortgage in advance and will give Lessor copies of all proposed loan documents at
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least 10 days prior to Lessee's intended closing date. If the proposed mortgage fully complies
with the requirements of Section 8. 1, Lessor must consent to the mortgage if:
a. Lessee is not in default on this Lease or to any creditor;
b. The Permitted Mortgage and related documentation contain no terms other than
provisions generally contained in mortgages used for similar transactions in the Orange County,
North Carolina area by institutional mortgagees;
C. The Permitted Mortgage and related documentation do not contain any provisions
which could be construed as rendering Lessor or any subsequent holder of the Lessor's interest
in the Leased Premises liable for the payment of the debt evidenced by the note and Permitted
Mortgage or expose Lessor or Lessor's interest in the Leased Premises to and deficiency
judgment;
d. The Permitted Mortgage provides that the holder's rights to Lessee's share of any
condemnation award will attach only to that share of the award allocated to the Lessee in
accordance with Section 9.6 of this Lease;
e. Nothing in the Permitted Mortgage or related documentation obligates Lessor to
execute an assignment of the Ground Lease Fee or other rent payable by Lessee under the terms
of this Lease.
3. RIGHTS OF PERMITTED MORTGAGEE: Any Permitted Mortgagee will without
the requirement of consent by the Lessor have the right, but not the obligation, to:
a. Cure any default under this Lease, and perform any obligation required hereunder,
the cure or performance by a Permitted Mortgagee being effective as if the same had been
undertaken and performed by Lessee. In the event that Lessor sends a notice of default under the
Lease to Lessee, Lessor shall also send a notice of Lessee's default to Permitted Mortgagee.
b. Acquire and convey, assign, transfer and exercise any right, remedy or privilege
granted to Lessee by this Lease or otherwise by law, subject to the provisions, if any, in said
Permitted Mortgage, which may limit any exercise of any the right, remedy or privilege; and
C. Rely upon and enforce any provisions of this Lease to the extent that the
provisions are for the benefit of a Permitted Mortgagee.
Permitted Mortgagee will not, as a condition to the exercise of its rights, be required to
assume liability for the performance of the obligations of the Lessee under this lease. Any
payment or performance or other act by Permitted Mortgagee hereunder will not be construed as
an agreement by Permitted Mortgagee to assume liability except to the extent Permitted
Mortgagee actually takes possession of the Security and the Leased Premises or collects fees or
rentals from occupants. If Permitted Mortgagee does take possession of the Security and
thereupon transfers the Security, a transferee will be required to enter into a written agreement
assuming liability under this Lease and upon any the assumption the Permitted Mortgagee will
automatically be released from liability hereunder.
So long as Permitted Mortgagee has a security interest in the ground leasehold or the
Improvements, there will be no merger of the leasehold and fee estates even if both are owned by
the same person or entity unless Permitted Mortgagee consents to the merger. If the estate of
Lessor is owned at any time by Lessee (regardless of a merger), or by any person in which
Lessee has a direct or indirect interest, Permitted Mortgagee will not be obligated to cure any
default of Lessee hereunder as condition to the forbearance by Lessor in the exercise of Lessor's
remedies as herein provided.
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4. APPROVAL OF AMENDMENTS: Any amendments to this Lease will be
subject to the written approval of Permitted Mortgagee, which approval will not be unreasonably
withheld or delayed. The passage of thirty (30) days after submittal to Permitted Mortgagee of a
proposed amendment without approval or disapproval by Permitted Mortgagee will be deemed
approval thereof.
5. NEW LEASE TO PERMITTED MORTGAGEE: Upon written request of the
Permitted Mortgagee made within sixty (60) days of the termination of this Lease or upon its
rejection or disaffirmance under bankruptcy law or other law affecting creditors' rights, Lessor
will enter into a new lease of the Leased Premises with the Permitted Mortgagee (or with any
party designated by the Permitted Mortgagee, subject to Lessor's approval, which approval will
not be unreasonably withheld). The lease term will be for the remainder of the term of the Lease,
effective as of the date of the termination, rejection, or disaffirmance, and upon all the terms and
provisions contained in the Lease. The written request will be accompanied by a copy of the
new lease, duly executed and acknowledged by the Permitted Mortgagee or the party designated
by the Permitted Mortgagee to be the Lessee and the Permitted Mortgagee will have cured all
defaults under the Lease which can be cured by the payment of money. Any new lease made
pursuant to this Section will have the same priority with respect to other interests in the Leased
Premises as this Lease. The provisions of this Section will survive the termination, rejection, or
disaffirmance of the Lease and will continue in full effect thereafter to the same extent as if this
Section were an independent contract made by Lessor, Lessee and the Permitted Mortgagee.
6. NO TERMINATION DURING FORECLOSURE: The Lessor will have no right
to terminate this Lease once Permitted Mortgagee commences foreclosure in accordance with the
provisions hereof and is diligently pursuing the same.
7. PROVISIONS SUBJECT TO FORECLOSURE: In the event of foreclosure sale
by a Permitted Mortgagee or the delivery of a deed to a Permitted Mortgagee in lieu of
foreclosure in accordance with the provisions hereof, at the election of the Permitted Mortgagee,
the provisions of Sections 10.1 through 10.13 will be deleted and thereupon will be of no further
force or effect as to only so much of the Security so foreclosed upon or transferred.
8. NOTICE: Whenever in this Article notice is to be given to Permitted Mortgagee,
the notice will be given in the manner set forth in Section 14.2 at the address which has been
given by the Permitted Mortgagee to Lessor.
9. COSTS OF PERMITTED MORTGAGE: Lessee will pay to Lessor at Lessor's
option, as additional rent hereunder, all fees, costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred by Lessor in connection with any Permitted Mortgage.
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■ Exhibit H: CHT PROGRAM ELIGIBILITY POLICY
Program Eligibility Policy
Approved 9/14/16
The following criteria will be used to evaluate eligibility for specific homeownership
opportunities through Community Home Trust. Based on the following criteria, applicants
may qualify for the program, but must also meet affordability, subsidy, and lending
requirements in order to purchase a specific home.
Income Guidelines
The Home Trust is limited to selling most of its homes to buyers making less than 80% of
the area median income published by HUD each year. The Home Trust can sell certain
properties to buyers making up to 115% of the area median income.
Buyers over 80% AMI, are generally not eligible for new subsidy funds. However, buyers
above 80% maybe eligible to purchase homes already subsidized. Please seethe "Subsidy
Qualification Requirements" for more information.
In order to qualify to purchase a specific property, the buyer's income must be sufficient to
meet the affordability guidelines outlined below:
■ The buyer's total monthly housing costs (excluding utilities), must not exceed
30% of the buyer's gross monthly income.
Although program eligibility does not allow a buyer's housing ratio to exceed 30 %, the
Home Trust targets a maximum housing ratio of 28% (less, 1% for each dependent),
whenever possible.
Income Inclusions: The Home Trust will use the income inclusions required by HUD's
HOME program to determine eligibility, even if HOME funds are not being used. In certain
circumstances, the Home Trust reserves the right to exclude income when determining
affordability to purchase a home (see "Eligibility vs. Affordability Guidelines ").
Student and Work Status
Student Status
A student is defined as someone who is working less than 32 hours per week and is
enrolled in an undergraduate, graduate, or community college program. Students (both
single and married) are considered to have "temporarily reduced" income and therefore
may only purchase a Home Trust home if certain criteria are met:
■ New homes under construction: Student households will be eligible to purchase
any remaining units after C/0 has been issued
■ Existing homes: Student households may purchase a home after the home has
been marketed a minimum of 30 days.
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Applicants who have been out of school for ten or more years, and have returned for career
development, are not considered students.
Work Status
Each homebuying household should contain at least one individual who works a minimum
of 32 hours per week. Exceptions will be made in the following instances::
• An individual that is disabled, yet has sufficient income to meet other affordability
guidelines
• An individual is aged 65 or older
• An independent contractor or self- employed individual that has intermittent or
seasonal work, that otherwise meets program guidelines
• An individual who is the primary caretaker of either (1) a child under the age of 12,
or (2) a person who requires care throughout the day.
Additional exceptions may be granted for understandable reasons that can be adequately
documented.
Real Estate Ownership
Only qualified applicants without any other residential real estate holdings or mortgage
obligations will be permitted to establish contract and purchase a Home Trust home. An
exception may be granted if someone holds partial ownership in a property as a result of an
estate and it has not been their primary residence. An exception may also be granted in
certain situations that involve real estate ownership in foreign nations. The property will
be considered an asset and any income derived from the property will be calculated
towards qualifying income.
First Time Homebuver
A first time homebuyer is defined using the HUD definition, which is someone who has not
owned a home in the past three years, or who meet the "special circumstances" criteria as
outlined by HUD.
For the purposes of qualifying for the homeownership program, buyers do not need to be a
first time homebuyer.
• To purchase a home subsidized by new CDBG funds, buyers must meet first time
homebuyer requirements. After the home has been marketed for 30 days, this
requirement is waived.
• To purchase a home subsidized by new HOME or Bond Funds, buyers must meet
first time homebuyer requirements. After the home has been marketed for 90 days,
this requirement is waived.
Buyers who are not first time homebuyers, may purchase a home with HOME or CDBG funds
already invested in them, as long as the affordability period has expired. The appropriate
jurisdiction must be notified.
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Residency Requirements
Applicants must be U.S. Citizens, Permanent Residents, or Registered Aliens to qualify for
the program. This does not guarantee an applicant's ability to purchase, as each lender
and subsidy source has their own guidelines that must be met.
Priority will be given to applicants who currently live or work in Orange County, however,
it is not a requirement to qualify for our program.
■ Orange County requires buyers to live or work in Orange County at least 1 year
prior to purchasing a home subsidized by HOME funds. This requirement shall be
waived after 90 days of marketing.
■ The Town of Chapel Hill requires buyers to live or work in Orange County at least 6
months prior to purchasing a home subsidized by CDBG funds. This requirement
shall be waived after 30 days.
Appropriate Unit Size
We will attempt to match household size to unit size, allowing for larger units to be sold to
larger households. For example, a 2 person household is eligible to purchase a 1 -2
bedroom home. See the "Exceptions Policy" for eligible exceptions.
Assets
All assets are assumed to be income generating, even if they are not. HUD's published
imputed interest rate is used on all non - income generating assets and this income is
included when determining income for eligibility.
The value of assets (after a downpayment and closing costs) is considered when awarding
subsidy. Applicants with assets that are not invested in qualified retirement accounts will
be subject to the following eligibility review:
A. All households with non - retirement assets of less than $20,000 are considered
eligible for the program and all subsidy sources, provided they meet all other
eligibility requirements to purchase a home.
B. Households with non - retirement assets greater than $20,000, but less than
$100,000, can purchase a Home Trust home, but are not eligible for additional
subsidy.
C. Households with greater than $100,000 in non - retirement assets are not eligible
for the program, except in the following circumstances:
■ Over 6S years of age
■ Permanently disabled, with evidence of disability payments
Note: Applicants can receive a one -time gift to help them purchase a home up to a
maximum of $10,000. Seethe "Gift Policy" for more details, including possible exceptions.
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Miscellaneous
Over 65 years of age
45I5,158�uVIIIINININIIN
Applicants over the age of 65 at the time of purchase must comply with all program
requirements with the exception of:
• Do not need to work a minimum of 32 hours per week
• May have more than $100,000 in non - retirement assets
• Do not need to be a first time homebuyer - 30 day waiting period waived
• If purchasing a condo in the Town of Chapel Hill they do not need to meet residency
requirement - 30 day waiting period waived
Applicants over 65 years of age must still fulfill all educational requirements, regardless of
loan financing or first time homebuyer status.
Exceptions: Allowed exceptions to this policy are outlined in the attached "Exceptions
Policy. " Exceptions are granted based on desirability of certain properties, days on market,
buyer circumstances, and property deficiencies.
Subsidy: Each subsidy source requires different qualifications. See the "Subsidy
Qualification Requirements" for HOME, CDBG, AHDR, Bond, and CPLP qualification
requirements.
1st Mortgages: Except in rare circumstances, buyers must qualify for a 1st mortgage to
purchase a CHT home. See the "Lending Qualification Requirements" for the lending
qualifications of our current loan products.
Applicant Recourse to Appeal Provisions of this Policy: If an applicant wishes to appeal
for a waiver or modification of any of the above requirements, he /she may appeal to the
Community Home Trust Board of Directors. The Board of Directors will only consider
waivers for policies unrelated to subsidy requirements or the basic program guidelines.
An applicant's appeal should include a written, brief description of the situation and the
reason for the waiver request and can be sent directly to the Executive Director to discuss
with the Board. The decision of the Board of Directors is final and not subject to further
appeal.
Statement of Expectations of Full Disclosure: It is expected that every applicant provide
all relevant information that impacts his /her eligibility for the Community Home Trust
homeownership program. An applicant should fully and honestly disclose all information
used to determine program eligibility and subsidy allocation, including, but not limited to,
total household size, income, and assets. Withholding or misrepresenting information
regarding any criteria used to determine program eligibility or subsidy allocations
constitutes fraud and will result in immediate disqualification from the program, as well as
possible legal action.
Community Home Trust is an equal housing opportunity provider and does not
discriminate because of race, color, religion, sex, disability, familial status, or
national origin.
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N EXHIBIT H -1: APPEAL PROCESS
Community Home Trust Policy Regarding the Resolution of Disagreement about Applicant
Eligibility Process by which an Applicant may request a Board Review
Community Home Trust provides a review process for any applicant who disagrees with a
decision made by senior staff regarding the applicant's eligibility to purchase. This review is
limited to decisions regarding:
- Live /work eligibility requirements
- Meeting qualification for first time homebuyer status
- Income eligibility requirements
- Compelling or Special Circumstances
- Asset limits
The applicant should make the request directly to the Board President or by asking the Executive
Director to convey the request. This request should be made in writing and will include a brief
written summary that explains why the applicant disagrees with the staff decision or is requesting
a waiver. The Home Trust staff will also provide a brief summary of its decision and the reasons
for making the decision.
The Board President will, in a timely manner, convene a committee of at least 3 Board Members
to review the decision. The Executive Director may not serve on this Committee. The
Committee will first review the written summaries from the applicant and from the staff. The
Committee may, at its sole discretion, proceed with one of the following options:
Render a decision based upon the written information supplied by both parties,
Schedule a meeting with both parties to gather further information.
If a meeting is scheduled, then it will include the committee members, a member of the Home
Trust staff who is knowledgeable about the original decision, and the applicant. The Committee
will ask those questions it deems necessary to make an informed decision.
The Committee will render a decision within 10 business days of the review, or request
additional information. Once all information is received, the committee will provide a written
response to the applicant and the staff. Any decision made by the Committee is final and not
subject to further review.
Approved by the Community Home Trust Board: January 11, 2011
4 1 i
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RB6513 147 57/58
■ Exhibit I: REPAIR REQUIREMENTS
Upon Resale, Lessor expects Lessee to sell the Leased Premises in substantially the same
condition as when he or she purchased it. Specifically, Lessor expects that:
Mechanical and electrical systems will be in good working order;
Plumbing will be in good working order and free of stoppages or leaks;
Floor, wall, ceiling, and countertop finishes will be clean, in good condition and free of gouges,
holes and noxious odors;
Original appliances and fixtures will be present, clean and in good working order, or replaced
with an appliance of comparable quality, in good working order;
There will be no evidence of pest or vermin infestations;
Gutters and storm water management systems will be free of debris or blockage and in good
working order:
Landscaping, grading and drainage will be in good condition;
HVAC system will have been satisfactorily serviced within 60 days prior to resale;
A home inspection performed by a licensed home inspector will reveal no other damages.
Upon receiving a Notice of Intent to Sell from Lessee, Lessor and a professional home inspector
will inspect the Leased Premises and require that Lessee makes upfits or repairs as needed so that
the Leased Premises meets the standards described above before resale. Lessor may specify, at
its discretion, contractors and suppliers who are eligible to provide materials and labor for
required upfits and repairs.
DocuSign E,nvelre ID: 5C622784- 3DD9- 4F2B- 8D53- D3D3E1 D35BD4
■ Exhibit J: INVESTMENT BASIS
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The Investment Basis represents the amount of equity that the Lessee has invested in the
leasehold estate. It is calculated subtracting the total amount of the Lessee's subsidies and grants
from the sales price.
Lessee's Investment Basis
List Price
Minus
Minus
Minus
Minus
Equals
Lessee's signature:
Lessee's signature:
Amount Purpose / Source
Sales Price of Home
Amount of NCHFA Loan
Amount of FHLB Loan
Amount of CHT Funding Provided
other subsidy or grant to Lessee
Lessee's Investment Basis
Date:
Date:
Home Trust Representative: Date:
Please note: If homeowner has owned the home more than 30 years at the time of sale, the
amount of NCHFA funds provided to the homeowner for purchase should be ADDED BACK to
the investment basis prior to calculating earned appreciation. This step is consistent with the
conversion of the NCHFA funds to a monthly note payable after 30 years of homeownership
according to current NCHFA guidelines.